PM-Foundations – Performing Stakeholder Analysis

As a project manager, when I am assigned a new project I quickly dive into the “what” associated with the project.

What is the product we are building?

What is the scope of the project?

What is our budget?

What is the target date?

Equally important, but often overlooked, is the “who” component of the project. Performing stakeholder analysis early on during project initiation helps the project manager have a better understanding of who is interested in the project, who is impacted by the project, and who is going to help define and deliver the project. Having a better appreciation for these elements of the project helps the project manager develop a more purposeful approach to defining the project scope, budget, and timeline. Stakeholder analysis represents an effective technique to identify and assess the importance of key people, groups of people, or entities who can significantly influence or impact the project. Stakeholder analysis is generally performed once at the beginning of the project, but may be performed on a regular basis to track changes in stakeholder importance and influence/impact over time.

Purpose and Benefits of Stakeholder Analysis

Stakeholder analysis is one of the first steps to understanding and level setting stakeholder expectations. It also represents an excellent opportunity to initiate engagement of key stakeholders in the project. Stakeholder analysis related discussions helps the team identify:

  • Who may affect or be affected by the project
  • Potential issues that could disrupt the project
  • Target audiences for information distribution during the planning and executing phases of the project
  • Groups that should be involved in different stages of the project
  • Ways to manage negative stakeholders

In addition, stakeholder analysis related discussions are utilized to start to build the relationship between the project manager and key stakeholders, providing the following benefits to the project:

  • Provide stakeholders the opportunity to express their ideas/issues/concerns related to the project (before the project “has left the train station”)
  • Establish a sense of accountability and/or responsibility for the project
  • Enable effective risk identification & response planning
  • Create an excellent learning opportunity for both the project manager and the stakeholders

Who are the stakeholders?

The different types of stakeholders can be represented like layers of an onion (see the diagram of sample stakeholders below). Stakeholders closer to the center represent the “primary” stakeholders that are directly involved in or impacted by the project. Stakeholders depicted in the outer layers of the diagram represent the “secondary” stakeholders that are indirectly involved in or impacted by the project.

The “key” stakeholders are the primary and secondary stakeholders that have significant influence or importance associated with the project. The goal of the stakeholder analysis is to identify and capture information about the “key” stakeholders associated with the project. It is critical to gain a good understanding of the people that are important and relevant to the project, but you also do not want to create an “analysis paralysis” situation by including too many potential stakeholders in the process. Some of the questions utilized to identify the right people to involve in the stakeholder analysis include:

  • Who will use the product being delivered by the project? Who will represent the needs of these users?
  • Who initiated this project? Is this person / group the project sponsor?
  • Who is paying for this project?
  • Who will be involved in defining, designing, building, and implementing this product?
  • Who will support this product after it is implemented?
  • Are there external entities impacted by or influencing this project?
  • Will this project negatively impact individuals or groups within the organization (e.g., changing job responsibilities, or loss of jobs)?

Information Captured During Stakeholder Analysis

The following represents the type of information captured about each of the individuals identified during the stakeholder analysis:

  • Stakeholder Name / Group: Who is the stakeholder? What is their title and/or role? Where does this role fit in the organization?
  • Stakeholder Type: Is the person a primary (direct) or secondary (indirect) stakeholder? Based upon their influence or importance related to the project, are they considered to be a “key” stakeholder?
  • Date Identified: When was this stakeholder initially identified? Knowing when a stakeholder was identified / involved in the project can be useful when assessing potential changes introduced throughout the project life cycle.
  • Stake: What does the stakeholder stand to gain or lose based upon completion of this project?
  • Commitment: What is the stakeholder’s priority for this project compared to other work? I keep this simple by assigning “high”, “medium” or “low”. Generally the stakeholder’s priority assigned to the project is directly related to the stake in the project. Commitment level translates into the amount of attention or time the stakeholder intends on spending on the project.
  • Impact on project: How critical is this stakeholder’s involvement in the project? A stakeholder may be critical to the success of the project, even though he/she has little stake in or commitment to the project (based upon their overall influence / importance within the organization).
  • Next Steps: What specific needs/issues does this stakeholder have related to this project (e.g., status reporting, approval of deliverables, involvement of specific resources)? How can these needs or issues be addressed during planning or execution of the project?

After capturing the stakeholder information, I will generally sort the stakeholders by type (key stakeholders), and stake in the project. Sorting the stakeholders in a particular order helps to identify specific actions required based upon the information captured within the stakeholder analysis. Below is an example of the stakeholder analysis template that I utilize to capture stakeholder information.

I also summarize the key stakeholders utilizing the following four box matrix.

 

Low Interest

High Interest

High Power / Importance

Project Funding Approval

Project Advisors / Mentors

Project Sponsors

Steering Committee Members

Core Team Members

Low Power / Importance

Not relevant to the project

Extended Project Team Members

Subject Matter Expertise

 

How is Stakeholder Analysis Used to Manage the Project?

After spending the time and energy to capture and document stakeholder information, it is critical that you actually “do something” with it. Below are some of the very tangible activities that I rely heavily on the stakeholder analysis to complete.

  • Identify/Form the Core Team – Who are the key contributors required for the project? The stakeholder analysis provides information required to identify the individuals with the right skills and experience to effectively contribute to the project. This process also helps identify individuals that have a high level of interest in being involved in the project (for a wide variety of reasons).
  • Identify/Form the Steering Committee – Who are the individuals that will guide / govern the project? The stakeholder analysis provides information required to identify the individuals with the appropriate influence and interest associated with the project to make timely and solid decisions to resolve issues, manage changes, and approve milestones – keeping the project moving in the right direction.
  • Identify Additional Resources – Who are the additional resources required to contribute to specific deliverables or phases during the project? Similar to the core team, the stakeholder analysis helps identify additional resources that are required to successfully complete specific deliverables or project phases (based upon particular skills, and/or interests in the project). Important resources that fall into this category are the subject matter experts (SMEs).
  • Identify Other Actions Required – Based upon information captured during the stakeholder analysis are there other actions or activities that should be built into the project plans? These may be actions required to address specific issues / concerns that the stakeholder has about the project, or specific requirements they would like to be addressed throughout the project life cycle (e.g., status updates).

Your comments are very much appreciated. When and how have you performed stakeholder analysis? What has been the impact of stakeholder analysis on the overall success of the project?

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About Steve Hart
Practice Manager responsible for project leadership & delivery services for the Cardinal Solutions Group in the RTP area. I am a PMP with 25 years of project management and technical leadership roles, have developed an extensive practical knowledge that spans a wide variety of industries, and project delivery approaches. As a practicing PMP, I am a member of the North Carolina PMI chapter. I am an avid sports fan, particularly the Miami RedHawks, Cleveland Indians, Cleveland Browns, and most recently the NC State Wolfpack.

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