Stakeholders are specific people or groups who have a stake or an interest in the outcome of the project. Normally stakeholders are from within the company and could include internal clients, management, employees, administrators, etc. A project may also have external stakeholders, including suppliers, investors, community groups and government organizations.

Small projects typically do not have to worry too much about understanding and managing the stakeholder community in its entirety. As your project gets larger and larger however, you generally have more and more stakeholders to worry about. If you have a large and diverse stakeholder community it makes sense to perform a stakeholder analysis. In some cases you might want their help, in some cases you need their buy-in, and in some cases you need to make them aware of accomplishments of your project. This stakeholder analysis will help you determine the various stakeholder groups and what their role is on your project.

Use the following process for stakeholder analysis.

1. Identify Stakeholders

You can’t do the stakeholder analysis without first knowing who your stakeholders are. Organize a brainstorming session with your team to identifying all possible stakeholders. These could be individual persons or stakeholder groups. It is important to recognize the project team as a specific stakeholder group. This will allow the project manager to focus on their needs as well and make sure that their needs are taken into account on an ongoing basis throughout the project.

2. Determine the importance of each stakeholder

Look at each stakeholder and determine how important he is to the success of your project or what the impact would be on your project if the stakeholder had no connection at all. Categorize each stakeholder in terms of high/medium/low importance.  For example, if your project would proceed fine without a particular stakeholder, then the stakeholder probably has a low importance. If your project cannot be successful without him, he probably has high importance. This evaluation is important because sometimes you spend too much time and effort working with stakeholders that are of low importance to your project, while short-changing the time you spend on stakeholders that are very important.

Another area you need look at when determining the importance of a stakeholder is the inherent power of the person. You could ask whether the stakeholder has the power to block or hinder the progress of the project. Does the stakeholder have the power or influence to help make the progress of the project run smoother? This information is important to know. For example, you may categorize a stakeholder as having low importance if he was not actively engaged, but you may categorize him as high if he was to get engaged in the project.

3. Identify the interest level of each stakeholder

To varying degrees each stakeholders has a stake or interest in your project. You now need to identify what these stakes or interests are. In some cases a stakeholder might be expecting to get something specific from the project and will want to be kept informed of its progress and involved wherever possible. In other cases, the stakeholder may have very little interest in the project, other then to be kept informed. Again you can categorize each stakeholder in terms of high/medium/low interest.

4. Identify the impact each stakeholder can have on the project

You may now have a long list of people and organizations that will be affected to varying levels by your project. Now determine what their impact and influence are. Some stakeholders can block your project. Others have no formal power but are influencers. This information will help you determine how to work with the stakeholder Some may be interested in what you are doing and others may not care. You need to categorize each stakeholder into common groups to determine how best to manage each stakeholder.

5. Understand the emotional commitment of each stakeholder

Understanding the emotional commitment of each stakeholder is very important to your project. You need to understand their current opinion about the project and how they might react to it. Will they be a supporter or non-supporter of the project? You need to find out what or who influences their opinions and utilize this information to formulate your engagement plan.

In most cases you and your team should be able to determine the emotional standpoint of each stakeholder. But for those cases where you cannot, you should arrange a meeting with the specific stakeholder and ask them directly.

6. Determine how you will engage each stakeholder

For each stakeholder, you should identify a set of activities or even an overall approach to satisfy their needs. You should identify activities that help you to achieve your interest while also recognizing the relative importance of each stakeholder. Obviously you will spend more time working with stakeholders that are important to your project and less time on stakeholders that are of low priority. The purpose of this step is to define the activities that your project team needs to do to make sure that you address the interest of each stakeholder. You will definitely be communicating with many of these stakeholders, so some of these activities may overlap with your Communication Plan. It is okay to mention these in both places. You are still only going to execute each activity one time.

7. Gain agreement with the stakeholders when necessary

In some cases, stakeholders want things from your project. However, in other instances you need something from them. If you need something from the stakeholder or stakeholder group, make sure that they understand what your expectations are and make sure that they agree to provide it. For instance, the stakeholder group may need to provide resources, time, money, attention, feedback, etc.

8. Move the activities to the schedule

You don’t want to keep a separate stakeholder activity spreadsheet. After you identify the activities to engage the stakeholder groups, place all of the activities in the project schedule, along with who is responsible, the timeframe, estimated effort, etc.

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