Why Use Stakeholder Analysis?

A stakeholder-based approach gives you four key benefits:

1. Getting Your Projects In to Shape

You can use the opinions of your most powerful stakeholders to help define your projects at an
early stage. These stakeholders will then more likely support you, and their input can also
improve the quality of your project.

2. Winning Resources

Gaining support  from powerful stakeholders can help you to win more resources, such as
people, time or money. This makes it more likely that your projects will be successful.

3. Building Understanding

By communicating with your stakeholders  early and often, you can ensure that they fully
grasp what you’re doing and understand the benefits of your project. This means that they can
more actively support you when necessary.

4. Getting Ahead of the Game

Understanding your stakeholders means that you can anticipate and predict their reactions to
your project as it develops. This allows you to plan actions that will more likely win their
support.

How to Conduct a Stakeholder Analysis

There are three steps to follow in Stakeholder Analysis. First, identify who your stakeholders
are. Next, work out their power, influence and interest, so that you know who you should focus
on. Finally, develop a good understanding of the most important stakeholders, so that you
know how they are likely to respond, and how you can win their support.

When you’ve completed your analysis, you can move on to use stakeholder management to
work out how you’ll communicate with each stakeholder.
Let’s explore the three steps of Stakeholder Analysis in more detail:

1. Identify Your Stakeholders

Start by brainstorming  who your stakeholders are. As part of this, think of all the people who
are affected by your work, who have influence or power over it, or have an interest in its
successful or unsuccessful conclusion.
The table below identifies some of the people who might be stakeholders in your job or in your
projects:

Your boss Shareholders Government

Senior executives Alliance partners Trades associations

Your co-workers Suppliers The press

Your team Lenders Interest groups

Customers Analysts The public

Prospective customers Future recruits The community

Your family Key contributors Key advisors

Note:
Stakeholders can be both organizations and people, but ultimately you must communicate with
people. So, be sure to identify the correct individual stakeholders within a stakeholder
organization.

2. Prioritize Your Stakeholders

You may now have a list of people and organizations that are affected by your work. Some of
these may have the power either to block that work or to advance it. Some may be interested
in what you are doing, while others may not care, so you need to work out who you need
to prioritize .
You can map out your stakeholders, and classify them according to their power over your work
and their interest in it, on a Power/Interest Grid (see figure 1). (Our Interactive Screen
App  makes this step easy to accomplish, or you can download a template of the grid by clicking
on the "download template" button at the end of this article.)
Figure 1: Power/Interest Grid for Stakeholder Prioritization

 
Adapted from Mendelow, A.L. (1981). 'Environmental Scanning - The Impact of the
Stakeholder Concept,' ICIS 1981 Proceedings, 20.
The position that you allocate to a stakeholder on the grid shows you the actions you need to
take with them:

 High power, highly interested people (Manage Closely): you must fully engage these
people, and make the greatest efforts to satisfy them.
 High power, less interested people (Keep Satisfied): put enough work in with these people
to keep them satisfied, but not so much that they become bored with your message.
 Low power, highly interested people (Keep Informed): adequately inform these people,
and talk to them to ensure that no major issues are arising. People in this category can often
be very helpful with the detail of your project.
 Low power, less interested people (Monitor): again, monitor these people, but don’t bore
them with excessive communication.
Your boss, for example, likely has high power and influence over your projects and high interest
in them. Your family, however, may have high interest in them, but won’t have power over
them.

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3. Understand Your Key Stakeholders

You now need to discover how your key stakeholders feel about your project. You also need to
work out how best to engage them, and how to communicate with them.

Questions that can help you understand your stakeholders include:

 What financial or emotional interest do they have in the outcome of your work? Is it positive
or negative?

 What motivates them most of all?

 What information do they want from you, and what is the best way of communicating with
them?

 What is their current opinion of your work? Is it based on good information?

 Who influences their opinions generally, and who influences their opinion of you? Do some
of these influencers therefore become important stakeholders in their own right?

 If they aren’t likely to be positive, what will win them around to support your project?

 If you don't think that you’ll be able to win them around, how will you manage their
opposition?

 Who else might be influenced by their opinions? Do these people become stakeholders in
their own right?

You can ask  your stakeholders these questions directly. People are often quite open about
their views, and asking for their opinions is often the first step in building a successful
relationship with them.
A simple way to summarize the level of backing you have from your stakeholders is to color-
code them. For example, show advocates and supporters in green, blockers and critics in red,
and those who are neutral in orange. See the diagram, below.

Figure 2: Example Power/Interest Grid With Stakeholders Marked

Adapted from Mendelow, A.L. (1981). 'Environmental Scanning - The Impact of the
Stakeholder Concept,' ICIS 1981 Proceedings, 20.
In figure 2, you can see that a lot of effort needs to be put into persuading Piers and Maureen
of the benefits of the project, while Janet and Amanda also need to be managed effectively as
powerful supporters.

Example of a Stakeholder Analysis

You can create your own example of Stakeholder Analysis at work – whether for your current
role, a job you want to do, or a new project.
Conduct a full stakeholder analysis. Ask yourself whether you are communicating as effectively
as you should be with your stakeholders. What actions can you take to get more from your
supporters or win over your critics?

Add your stakeholders to our free Interactive Screen App below. You can move your
stakeholders around, or change their color, depending on what your analysis reveals.

 
   

Adapted from Mendelow, A.L. (1981). 'Environmental Scanning - The Impact of the
Stakeholder Concept,' ICIS 1981 Proceedings, 20.
Key Points
As the work you do and the projects you run become more important, you will affect more and
more people. Some of these people have the power to undermine your projects and your
position. Others may be strong supporters of your work.

Stakeholder Management is the process by which you identify your key stakeholders and win
their support. Stakeholder Analysis is the first stage of this, where you identify and start to
understand your most important stakeholders.
The first stage of this is to brainstorm who your stakeholders are. The next step is to prioritize
them by power and interest, and to plot this on a Power/Interest grid. The final stage is to get
an understanding of what motivates your stakeholders and how you need to win them around.