How to perform a stakeholder analysis
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Posted by: Lucid Content Team
You’ve crunched the numbers. You’ve built out your case for a new project or technology investment. You’ve got all the resources to make it happen.
But you’re still missing a step—and arguably the most important one: stakeholder approval and buy-in.
Stakeholders are built into every organization to help ensure that messaging is accurate, work stays on track, or new initiatives are aligned toward shared business goals. While their intentions are good, often stakeholders can be viewed as a roadblock to progress.
That’s why it’s so important to understand the stakeholder analysis process and make sure your goals will actually garner support. Here, we’ll dive into how to identify and gain the support of key stakeholders at your organization.
Who is a stakeholder—and why do they matter?
The sign of a growing career is an expanding number of people affected by your actions and decisions. As your popularity, responsibility, or influence expands, more people will begin to be affected by your work. These people appear at various levels: Some of them may be your peers or co-workers, others may be your superiors, and others still may be your subordinates. Even friends and family may become affected by your work decisions, celebrating wins with you and lamenting losses just the same.
To have a sustainable upward trajectory, it’s smart to think carefully about the types of relationships you have affecting your professional life and projects, as much of professional success centers around managing relationships well. Anyone who is affected by the outcome of your work is referred to as a stakeholder.
What is a stakeholder analysis?
Stakeholder buy-in and approval is just as much about communication, education, and visibility as it is about strategic alignment. Stakeholders must be able to quickly and easily understand where a new project or investment fits into the larger business picture.
A stakeholder analysis allows you to map out and establish the appropriate level of communication with your stakeholders relative to their influence and interest in your project. A thoughtful stakeholder analysis will prime you for the advocacy you need or prepare you for the opposition you anticipate.
A stakeholder analysis template, also known as a power interest grid, can help you in four key ways:
- Gathering crucial input: You don’t know what you don’t know. Often, key stakeholders can deliver valuable insight that can help keep your project on track and successful.
- Gaining more resources: If your stakeholder has a full understanding of what it will take to get your project off the ground, they may be able to help you secure the people, tools, and resources you need to make you successful.
- Building trust: By consistently engaging and involving stakeholders in your process, you’re building trust that may make them quick to support upcoming projects.
- Planning ahead: Consistent feedback from key stakeholders helps you anticipate feedback and requirements on future projects and gain buy-in more quickly.
How to perform a stakeholder analysis
Performing a stakeholder analysis involves these three steps.
Step 1: Identify your stakeholders
Brainstorm who your stakeholders are. To do this, list all of the people who are affected by your work or who have a vested interest in its success or failure. Some of these relationships may include investors, advisors, teammates, or even family.
Step 2: Prioritize your stakeholders
Next, prioritize your stakeholders by assessing their level of influence and level of interest. The Stakeholder Power Interest Grid is the leading tool in visually assessing key stakeholders.
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: Fully engage these people, and make the greatest efforts to satisfy them.
- High power, less interested people: Keep these stakeholders satisfied, but not so much that they become bored with your message.
- Low power, highly interested people: Adequately inform these people, and talk to them to ensure that no major issues arise. People in this category can often be very helpful with the details of your project in a supportive role.
- Low power, less interested people: Again, monitor these people, but don’t bore them with excessive communication.
Step 3: Understand your key stakeholders
Now that stakeholders have been identified and prioritized, you need to understand how they feel about your project. Some good questions to ask include:
- Do they have a financial or emotional interest in the outcome of your work? Is it positive or negative?
- What motivates them the most?
- Which of your project information is relevant to them, and what is the best way to relay that information?
- What is their current opinion of your work? Is that opinion based on accurate information?
- Who influences their opinion, and are those influencers also your stakeholders?
- If they’re not likely to be supportive of your project, what can you do to win their support?
- If you can’t win their support, what can you do to manage their opposition?
Once you've prioritized your stakeholders and consider their attitude toward your project, you should also consider creating a project management communication plan. A communication matrix will let everyone involved know how often they need to loop stakeholders in.
The most common stakeholders
Below is a list of common stakeholders and some examples of effective communication strategies with them.
Your direct manager/supervisor
High power, high interest
Your boss’s reputation is tied to the productivity of the people they lead. Your boss also likely has the power to greenlight or shut down your project(s). This means that you should manage this relationship closely, communicating frequently and requesting and utilizing feedback.
High power, medium interest
Shareholders and investors usually hold stake in multiple entities, diluting their unique interest in your project/undertaking. As such, to leverage their investment in your work, you should communicate frequently with them, consult and involve them, with a goal of increasing their interest over time. This is obviously dependent on the type of investment role that exists, and whether your project is the sole investment or part of a portfolio of investments.
High power, probably low interest
The government controls the laws and regulations that could shut down your business or project. An example would be health code inspectors for restaurants, IRS auditors for general business, etc. Because government entities monitor everything/everyone, their interest in your individual business/endeavor is likely low. As such, your goal should be to keep them satisfied, communicating regularly, consulting and involving them in order to prevent them from being a risk to your project.
High power, low interest
Your company’s senior executives make the biggest decision, giving them high influence but limited bandwidth to focus on the outcomes of your project. This means your strategy should be to keep them satisfied by communicating as regularly as is necessary, consulting and seeking feedback, with a goal of increasing their interest in you and your work.
Medium power, medium interest
Co-workers carry a range of influence, but mostly their influence will be in their ability to leverage additional resources for your project, including the support of other co-workers and your superiors. That means you want to keep them satisfied and keep them informed. Update them on your project, and be willing to leverage their interest into a supporter role.
The tools you need to keep stakeholders informed
No matter the level of technical knowledge around your project, visuals including a stakeholder diagram are a great way to communicate your project to your key stakeholders and get their buy-in. Further, it’s useful to know not only what to communicate, but how often to communicate.
Lucidchart offers numerous templates and matrices to help you keep stakeholders informed and updated on new and in-progress projects.
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