A Complete Guide to Performing a Stakeholder Analysis

Stakeholder analysis is the first phase of stakeholder management, which is a process used by successful project managers to secure support from potential investors. Good stakeholder management can help ensure the success of your project. Understanding how the analysis process works and how to manage these important groups of people helps encourage the right investors for your project. In this article, we explore the meaning and benefits of stakeholder analysis, discuss why it's important, and explore a template and examples to help you perform your own.

Related: What is Project Management? Definition, Steps, and Skills

What is stakeholder management?

Stakeholder management is the process of organizing, monitoring, and improving interactions with individuals and groups that have an interest in a project. It involves identifying stakeholders, assessing their needs and expectations, and preparing and carrying out specific tasks to engage with them. An effective stakeholder management plan allows you to organize your interactions while continuously assessing the status and quality of your relationships. By conducting a stakeholder management analysis, you can help ensure that key people in the company understand the value of your project and recognize the resources needed for its completion.

Companies are typically only able to operate with the assistance and support of stakeholders, so addressing their interests is critical for all organizations. It's important to conduct stakeholder management efficiently as some may have the capacity to obstruct your ability to do business.

Related: 22 Essential Project Management Skills

What is stakeholder analysis?

Stakeholder analysis is the process of identifying the key participants in a project before it begins. This involves categorizing them based on their level of engagement, interest, and impact on the project and establishing how best to engage and interact with each stakeholder group throughout the project work. Stakeholders can be made up of external personnel and also internal team members. Understanding, outlining, and securing project stakeholders is one of the most challenging components of a project.

Related: What Is a Stakeholder, and How Should You Prioritize Them?

Why is stakeholder analysis important?

This is an important element in the process of stakeholder management because engaging company influencers, managers, and other key figures in the early phases of your project will allow you to use their insight and expertise to complete the work. Enlisting these stakeholders early can also help to increase the likelihood that they support your initiative. The results of your analysis can help you decide who to include in the project, allowing you to approach them for early-stage meetings to discuss key goals and intentions.

This kind of evaluation ensures that everyone involved in the project understands your goals and how they can contribute. Proper analysis can help you do the following with your stakeholders:

• Determine who they are and their level of interest

• Determine how to include them in the project

• Interact with them

• Manage and involve them in various

• Use their suggestions and opinions to improve the project

• Determine how to raise their interest and support for the project

• Obtain resources such as money, time, and personnel

Related: A Guide on the Role of Stakeholders (Types and Examples)

How to perform a stakeholder analysis

Here are the steps you can take when undergoing this process at the start of a project:

1. Identify potential stakeholders

Begin by compiling a list of all possible stakeholders. This can be any individual or group with an interest in the project and its outcomes or operations including clients, distributors, and team members. A stakeholder can be anyone who:

• A company has a legal obligation to

• Has the ability to influence the outcome of a project

• Can express concerns regarding the project and its activities

• Can assist the project manager in addressing concerns

• Can control and ensure the project fulfills client requirements

Stakeholders can be internal or external to the organization. Internal stakeholders are individuals or groups who have a close relationship with the project such as employees, managers, investors, and strategic partners. An external stakeholder is a person or organization that can impact a company's operations. This may include suppliers, creditors, or the community where the company is located. They can also be organizations, groups, or people. If the stakeholder is an organization, make sure to identify a primary contact within that organization.

2. Prioritize your stakeholders

Certain people or groups may have more influence and interest in your project than others, and understanding their significance allows you to involve and interact with them appropriately. Consider the following elements when attempting to determine a particular stakeholder's influence on a project:

• Leadership

• Resource management

• Bargaining power

• Legal authority

• Unique knowledge and abilities

• Social status

• Impact on other stakeholders

• Reliance on other stakeholders

Use a tool that allows you to examine your stakeholders and prioritize them visually. The position of each on the list indicates how you engage with them. This graphic approach to categorization is very effective when tens or even hundreds of people are engaged or involved in a project. It allows you to think of, speak with, and supervise them as groups rather than individuals.

Related: Key Stakeholders and Strategic Decision Making (With FAQs)

3. Understand their position

Now that you've identified and prioritized your stakeholders, it's important to know how they feel about your project. Here are some helpful questions to ask to determine this:

• Do they have a vested stake in the success of your work, either financially or emotionally? Is it favourable or unfavourable?

• What is the greatest motivating factor for them?

• Which of your project's information is relevant to them, and how can you communicate that information to them?

• What are their current thoughts on your work? Is that opinion based on reliable information?

• Who affects their decisions, and are those decision-makers also stakeholders?

• What can you do to gain their support if they are unsupportive of your project?

Related: A Comprehensive Guide to Stakeholder Mapping (With Tips)

Benefits of stakeholder analysis

The following are the benefits of evaluating and analyzing potential project stakeholders:

• Saves time and energy: When you discover who has the most influence over your project and collaborate with them, it can save you a lot of time and allows you to give more attention to the goal.

• Helps you focus on your resources: Once you've classified your stakeholders, you can decide where to direct your efforts. This approach can also help you identify potential hazards that may occur during your project and allocate the necessary resources to address these concerns.

• Ensures efficient collaboration: It may be helpful to do an evaluation exercise with the entire team. Working together ensures that everyone has a shared understanding from the outset of the project.

• Ensures you engage all of the key stakeholders: These players have the power to negatively or positively influence your project, so recognizing them early in the process and forming connections is critical. While it's usual to focus on how stakeholders can harm initiatives, it's vital to recognize that stakeholders have valuable experiences and information to help your project.

Stakeholder evaluation template

Here is an example of an evaluation template that you can build upon to suit your specific needs during the stakeholder analysis process:

Name: [Full name of stakeholder]

Role: [Stakeholder's position in the company or project, you can list multiple roles]

Involvement: [High, medium, low]

Influence: [High, medium, low]

Support: [Does the project have their support? Yes, no, neutral]

Conditions met: [Does the project achieve what they want it to achieve? Yes, no, and somewhat]

Motivation: [What inspires them?]

Stakeholder evalutaion examples

When undergoing this process you can organize your information in a chart, map, or spreadsheet. Here are some examples of stakeholder evaluations that you can use to influence your own analysis process:

Stakeholder evaluation for an investor

Here is a stakeholder evaluation example for an investor:

Name: Alice Morgan

Role: CEO Ironcast Motors, investor

Involvement: High

Influence: High

Support: Yes

Conditions met: Yes

Motivation: Financial motivation. Has provided up to 40% of funding to ensure the project succeeds.

Stakeholder evaluation for a team member

Here is a stakeholder evaluation example for a team member:

Name: Drake King

Role: Project coordinator, team member

Involvement: High

Influence: Low

Support: Yes

Conditions met: Yes

Motivation: Financial motivation. Receives shares in the company after the successful implementation of the project.

Stakeholder evaluation for an organization

Below is a stakeholder evaluation example that is for an organization:

Name: Parkwood Incorporation

Role: Investor

Involvement: Mid

Influence: Mid

Support: Partly

Conditions met: Yes

Motivation: Financial motivation. Has provided up to 20% of funding to ensure the project succeeds.

Please note that none of the companies, institutions, or organizations mentioned in this article are affiliated with Indeed.