What is Stakeholder Analysis? – Part 3

This topic is continuation of earlier posts what is stakeholder analysis? – Part 1 & what is stakeholder analysis? – Part 2

In this final post we discuss the three essential steps in stakeholder analysis in detail. Following are the vital steps in any stakeholder analysis:

* Stakeholder identification and documenting their interests (+ve or -ve) in the project

* Assessing the power of, importance of & level of impact upon each stakeholder

* Identifying how best to engage stakeholders in the project by analyzing their reactions or response in different situations.

1) Stakeholder identification and documenting their interests (+ve or -ve) in the project

This is the first step in stakeholder analysis. In Stakeholder identification process, project manager with the help of project management team need to identify all individual or organizations impacted by the project, and documenting their interests. Stakeholder identification is critical for any project – usually it is done early planning stage, and complete knowledge about stakeholders increases probability of project success.

Key stakeholder identification may be easy task to do. General list of key stakeholders are:

Project Manager,

Customer/user, Project team members,

Performing organization,

Project management team,

Sponsor and

major influencers.

Above key stakeholders are actively involved in the project & whose interests may be affected as a result of project execution or project completion.

Identifying other or secondary stakeholders can be done either brainstorming or interviewing with experts/project management team on the project area. Project manager can start with an analysis of the stakeholders and then link them to specific threat and opportunity factors.

Some of the key questions project manger may ask at this step include(not limited to):

• Who is threatening the target of this project?
• Who is most dependent on this project?
• Has there been a similar project in the market? If so, to what extent did it succeed? Who was in charge and how did local stakeholders respond?
• Who possesses claims – including legal jurisdiction and customary use – over the project/resources at stake?
• Is any government departments to be involved in this project?
• Are there national and/or international bodies involved in this project because of specific laws or treaties?
• Who are the people or groups most knowledgeable about, and capable of dealing with the project at stake?
• Are the stakeholders and their interests stable across the globe or is there any identifiable pattern exists?
• Are there major events/trends/activities currently affecting the stakeholders?
• Is this project replaceable by other project(s)?

Best tool in identifying the key stakeholders and their interests is brainstroming. Begin by brainstorming all possible stakeholders using a questionnaire(like the one listed above). Then research the general stakeholder behavior. Talk to various stakeholders, and ask them who they would see as potential stakeholders for the initiative in question. The list of stakeholders may grow or shrink as the analysis progresses, and the understanding deepens. Further, try to learn about each stakeholder group in as much depth as possible.

2) Assessing the power of, importance of & level of impact upon each stakeholder

In this step, stakeholders are organized and categorized according to their likely influence over decisions to be made, and the likely impact of project decisions upon them.

Key questions for this second step in a stakeholder analysis include(not limited to):

• Who is directly responsible for decisions on issues important to the project?
• Who holds positions of responsibility in interested organizations?
• Who is influential in the project area (both thematic and geographic areas)?
• Who will be affected by the project?
• Who will promote/support the project, provided that they are involved?
• Who will obstruct/hinder the project if they are not involved?
• Who has been involved in the area (thematic or geographic) in the past?
• Who has not been involved up to now but should have been?

Power – Interest grid (as shown below) is the best tool to plot the stakeholders based on the outcome of above questions. Depend on the quadrant a stakeholder plotted, project manager need to plan his future actions.

Explanation on actions for these quadrants already available in Stakeholder Analysis – Part 2.

3) Identifying how best to engage stakeholders in the project by analyzing their reactions or response in different situations

Finally, the third step involves determining how to involve the different stakeholders. Different types of stakeholders will be engaged in different ways in the various stages of the project, from gathering and giving information, to consultation, dialogue, working together, and partnership. Determining who needs or wants to be involved, and when and how that involvement can be achieved provides the basis for developing collaborations.

Once stakeholder views are understood, a decision can be made on whether to pursue collaboration. The importance of the process in planning and conducting successful collaborations cannot be overemphasized. Good-faith efforts are often derailed because the parties are not skilled in working together, and because insufficient attention is given to designing and managing it. Using an inclusive, transparent approach during project development and implementation will help build ownership and commitment. If it is not possible or realistic to have all key stakeholders involved from the outset, then a process for gradual involvement may be needed.

( Reference : Stakeholder Collaboration by Ecoregional Conservation Strategies Unit, Research and Development, WWF, Washington)

What is Stakeholder Analysis? – Part 2

In earlier post, we reviewed few basics on Stakeholder Analysis. In this post, let us review few more important information.

Whatever method is for stakeholder management used, following are essential steps for stakeholder analysis:

* Stakeholder identification and documenting their interests (+ve or -ve) in the project

* Assessing the power of, importance of & level of impact upon each stakeholder

* Identifying how best to engage stakeholders in the project by analyzing their reactions or response in different situations.

There are multiple category of models available, some of them:

• Power/Interest grid
• Power/Influence grid
• Influence/Impact grid

Power/Interest grid is widely used tool in stakeholder analysis & it is used in assessing stakeholders (step 2). In this model, each stakeholder is mapped to different quadrant based on their interest on the project against the influence (power) they have over the project.

High power, interested people: these are the people you must fully engage and make the greatest efforts to satisfy.

High power, less interested people: put enough work in with these people to keep them satisfied, but not so much that they become bored with your message.

Low power, interested people: keep these people adequately informed, and talk to them to ensure that no major issues are arising. These people can often be very helpful with the detail of your project.

Low power, less interested people: again, monitor these people, but do not bore them with excessive communication.

Even the identified stakeholder is an organization, it is better to exactly document the key person’s name for the organization to have better control over situation at times.

As a Project Manager we need to know – when to do & use stakeholder analysis outputs in Project Management Life Cycle?

Let us try to answer this question in detail.

Stakeholder analysis can be undertaken throughout all stages of the project cycle, but it definitely should be undertaken at the outset of a project. Moreover, project stakeholders have high influence over the project at the start and it decreases as the project continues.

In particular, during the Initiating phase, process of identifying stakeholders impacted by the project is crucial. Project Manager can get list of key stakeholders from earlier projects executed in their organization. Project manager should document relevant information regarding stakeholders’ interests, level of involvement, and their impact on project success.

During the Planning phase, a detailed stakeholder analysis, involving all key stakeholders, will help shape the development of strategic actions and risk analysis. Stakeholder analysis is an important input for Project manager in Communication Planning.

In the Execution phase, stakeholder analysis will help identify who, how and when stakeholders should be involved in project activities and whom to communicate regarding project progress depending on their responsibility & authority levels.

During the Monitoring & Controlling phases, the stakeholder analysis serves as a tool, providing a baseline against which projects can monitor and evaluate the effectiveness of their engagement with stakeholders, both supportive and opposing.

What is Stakeholder Analysis – Part 3 discusses about the three essential steps in stakeholder analysis in detail.

What is Stakeholder Analysis? – Part 1

After review of definition of stakeholders and roles & responsibilities of few stakeholders like Project manager & Sponsor, it is good to deal in detail on Stakeholder Management & Analysis.

Just a recap of definition of project stakeholder:

Project stakeholders are individuals and organizations that are actively involved in the project, or whose interests may be affected as a result of project execution or project completion.

Stakeholders are all those who need to be considered in achieving project goals and whose participation and support are crucial to its success. So identification of all stakeholders is an important activity of the project manager to ensure project success.

As all we know, stakeholders can be 1) individuals within the project 2) individuals or departments within the organization & 3) individuals or groups outside the organization (can be influencers)

Stakeholder Management processes for a project involves (but not limited to)

1) Identifying all stakeholders

2) Documenting stakeholders needs

3) Assessing & analyzing stakeholders interest/influence

4) Managing stakeholders expectations

5) Taking actions

6) Reviewing status & repeat

What is Stakeholder Analysis?

Stakeholder Analysis is an important technique for stakeholder identification & analyzing their needs. It is used to identify all key (primary and secondary) stakeholders who have a vested interest in the issues with which the project is concerned.

The aim of stakeholder analysis process is to develop a strategic view of the human and institutional landscape, and the relationships between the different stakeholders and the issues they care about most.

What are the benefits of Stakeholder Analysis?

A stakeholder analysis can help a project to identify:

• The interests of all stakeholders, who may affect or be affected by the project

• Potential issues that could disrupt the project

• Key people for information distribution during executing phase

• Groups that should be encouraged to participate in different stages of the project

• Communication planning & stakeholder management strategy during project planning phase

• Ways to reduce potential negative impacts & manage negative stakeholders

Engaging stakeholders throughout the project life cycle is a key to (but not a guarantee of) project’s success.

Managing stakeholders expectations & ensuring their active involvement is very much important to project as:

• It is indispensable for continuation of the project & its successful completion

• It gives opportunity to individuals or groups to express their ideas/issues/concerns over the project

• It gives a sense of accountability and enhances responsibility

• It enables effective risk identification & response planning

• It opens up excellent learning opportunity for both the project team and stakeholders

Let us review – what are the essential steps for stakeholder analysis, stakeholder assessment models, when to use stakeholder analysis in the Part 2 of this topic.

And What is Stakeholder Analysis – Part 3 discusses about the three essential steps in stakeholder analysis in detail.

Project Stakeholders

Let us take the following scenario:

“Government came up with a sea canal project last year. Currently, ships have to travel around an island to reach other side. By executing this project, ship travel becomes cheaper as it takes shorter route than earlier.

But environmentalists are concerned that this project will endanger the fragile marine ecology of the area through constant dredging to maintain a canal depth of about 10 m. The increase in shipping traffic will inevitably result in an increase in oil spills and marine pollution. So they protested for the execution of the project without proper clearance from national environment group before starting the project.”

What do we understand from this story?

Environmental groups are negative stakeholders in the sea canal project as they stops the project execution.

Let us examine the definition of Project stakeholders now.

Project stakeholders are individuals and organizations that are actively involved in the project, or whose interests may be affected as a result of project execution or project completion.

They may also exert influence over the project’s objectives and outcomes.

The project management team must identify the stakeholders, determine their requirements and expectations, and, to the extent possible, manage their influence in relation to the requirements to ensure a successful project.[1]

As mentioned in the example, it is not required that stakeholders must have negative influence on the project. Stakeholders may have a positive or negative influence on a project.

So, what is positive or negative stakeholder means?

Positive stakeholders are those who would normally benefit from a successful outcome from the project, while negative stakeholders are those who see negative outcomes from the project’s success. [2]

It is Project manager’s duty to identify all stakeholders, gather their requirements, manage their expectations and appropriately communicating them in timely manner depending on their responsibility & authority levels. Moreover, project stakeholders have high influence over the project at the start and it decreases as the project continues.

Let us examine few key stakeholders:

• Project manager – The person responsible for managing the project.

• Customer/user – The person or organization that will use the project’s product.

• Performing organization – The enterprise whose employees are most directly involved in doing the work of the project.

• Project team members – The group that is performing the work of the project.

• Project management team – The members of the project team who are directly involved in project management activities.

• Sponsor – The person or group that provides the financial resources, in cash or in kind, for the project.

• Influencers – People or groups that are not directly related to the acquisition or use of the project’s product, but due to an individual’s position in the customer organization or performing organization, can influence, positively or negatively, the course of the project.[3]

The list is just a gist of key stakeholders. But whole list differs from project to project even projects are executed within the same organization.

References:
[1]. PMBOK^® Guide – 3rd edition – Page #. 24
[2]. PMBOK^® Guide – 3rd edition – Page #. 25
[3]. PMBOK^® Guide – 3rd edition – Page #. 26