Stakeholder analysis is a very important part of any project’s development. Whether you are starting a new project or working on an ongoing one, stakeholders analysing during this process is very important. When you are working on a project, your main goal is to complete it with proper planning and in the best manner. To ensure the success of your projects, it is important to manage stakeholders effectively. Stakeholders just not only help you avoid misunderstandings but also assist in addressing potential major issues before they arise. In this article, we will explain the importance of stakeholder analysis in simple words and detail.
What is a Stakeholder Analysis?
A stakeholder in an organisation is anyone involved or affected by any project undertaken internally. Stakeholder analysis is conducted to identify those before the beginning of the project and classify them based on their level of participation, interest, and influence in the project, alongside making determinations in managing each group's involvement and communication with people concerned in such a project.
How to perform a stakeholder analysis
This is a methodical process through which the stakeholders are identified, categorised, and given priority for effective engagement and communication throughout the project. Below is a guide on how stakeholder analysis is performed step by step:
Identify the stakeholders
The first stage in stakeholder analysis is to develop a brainstormed list of all possible stakeholders; these are those people or groups or organisations who might have vested interests pertaining to your business or project; in fact, they will be affected by it in some way. Stakeholders comprise both internal and external elements to the business. For example, a business partner and employees can be termed as internal stakeholders, while local community members and suppliers would be considered external stakeholders.
Prioritise your stakeholders
After categorising the organiser, the next step is to consider the stakeholders in terms of their power and interest in their operations. There are some stakeholders whose exertion and inquisitiveness over your business or project are not at the same level as others'- learning about the priority level can help to involve and communicate with them appropriately. To give you an example: some factors might be considered to determine the extent of influence a stakeholder may have on a project:
leadershipManaging resourcesPowering negotiationsLegal authoritySpecial skills and knowledgeEconomic, political, and social statusInfluence on other stakeholdersDependent on other stakeholdersUnderstand your stakeholders
After one has recognised and classified the people who will influence or be influenced by an issue or its decision, the further step of stakeholder analysis is to understand them. It would require asking the people questions about how they feel concerning the organisation or project. Such a method can either be through a questionnaire or during a meeting before the commencement of the project. The responses are valuable input in developing stakeholder engagement and in driving the communication plan.
Create a stakeholder analysis matrix
A stakeholder analysis matrix is storage of information about key stakeholders. This compiles all important data about stakeholders at one place enabling easy access while making important decisions. Though, matrix could be customised as required but important information to be gathered from each of the stakeholders are:
NamePower and degree of interestPoint of contactPrioritiesImpact of projectStrategy of engagementWhy is Stakeholder Analysis Important?
Stakeholder analysis is crucial to ensure that the outcomes of the projects are ensured. It gives an early alignment; helps in avoiding roadblocks and creates a roadmap to achieve the goals in terms of communication. Here is an in-depth understanding of why stakeholder analysis is vital.
It creates a clear purpose and strategy
The mornings of projects exist in a world of chaos; stakeholder analysis gives a clear purpose along with a strategy to get key players on board from the very beginning. With this in hand, the preparation and conduction of kick-off and early meetings will be less tedious and more effective. Lastly, stakeholders will be aware of what is required from them and how they stand to gain from the project objectives. Thus anytime there is a need to update a set of potential stakeholders, project monitoring will be supported with a process map to guide.
It helps you earn support
Stakeholder analysis gives you an inside look into who will lend a hand and who may require a little coaxing to get behind your vision and your goals. When you're in project planning mode, knowing who your work will impact and winning their support is crucial early on.
You can draw on their knowledge and expertise to deliver by working with them. These people act as a form of back-up in getting your project approved and convincing other stakeholders to be on board.
It avoids conflicts
There can't be a worse feeling than discovering a few weeks into a project that a principal stakeholder is against your approach and wants to allocate resources somewhere else. Such problems can be avoided by early identification of internal and external stakeholders. Successful stakeholder analysis makes you pick any potential detractors and concerns. Time is now to develop a plan that will address the objections of these detractors and show the advantages or benefits of this project to them. If they still opt not to come on board, you have not wasted the project team’s time but can go looking for another approach.
The role of stakeholder analysis in change management
Stakeholder analysis is a fundamental requirement of change management and plays a vital role at every level of the project life cycle. It informs and shapes the entire initiative for change from the initial planning until the very end. Stakeholder analysis is performed in change management organisations to:
Identify people who are affected by or who influence a particular change.Understand stakeholder expectations, worries, and likely responses to a given change.Assess the power and influence of different stakeholder categories.Formulate targeted communication and engagement strategies.Anticipate and mitigate any resistance to change.Align change initiatives with expectations from stakeholders and the organisation.
A change management framework integrated with stakeholder analysis equips organisations with stronger and more adaptable change strategies. Project teams will be able to make informed decisions on how precious resources will be allocated and, therefore, to adopt any number of approaches for different stakeholders. This means that change initiatives will have both the technical strength needed, as well as political acceptability and cultural alignment within the organisation.
The Power of Stakeholder Analysis for Project Success
Owing to the understanding of the requirements and needs of the relevant stakeholders-potential risks, conflicts are avoided and leveraged support in favor of the project along its life cycle. A stakeholder analysis helps with the rationale and gives a strategic direction, thereby enabling early alignment and, finally, sound decision-making on the advice of stakeholders' inputs. Through a well-done stakeholder analysis, the project team may be able to take the hardships of internal and external considerations for their project into account and thereafter see through delivering the project objectives without hurting its interest groups.
To help you raise your stakeholder management skills for enhanced project success, join this bespoke training at the British Academy for Training and Development in london. Learn how to handle the complexity of stakeholders to create schemes with genuine impact in your project. Contact us for our Training Courses in London today!