stakeholder analysis

How to perform a stakeholder analysis

Reading time: about 7 min

Topics:

  • Project management

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, stakeholders can often 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 perform a stakeholder analysis to identify and get buy-in from key stakeholders at your organization.

Who is a stakeholder—and why do they matter?

Projects are a collaborative effort that impact and intersect with multiple people, teams, organizations, and clients. Anyone who is affected by the outcome of your project, or is actively involved in the project, is referred to as a stakeholder.

This includes any people or groups that influence and are impacted by your project’s outcome, such as

  • Project manager
  • Team members
  • Senior management
  • Executives
  • Clients
  • Partners
  • Investors
  • Suppliers
  • End users

Stakeholders can include a wide range of people with varied—and often conflicting—interests that you will need to manage. Keeping stakeholders happy, informed, and on-board is essential to moving your project forward. That’s why understanding who your stakeholders are and what their level of investment and influence is on the project is critical to your success.

stakeholder map
Stakeholder map (Click on image to modify online)

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 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 to 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. 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.

There are two main groups of stakeholders: internal stakeholders and external stakeholders.

Internal stakeholders are individuals or groups within your business, such as team members or leadership.

External stakeholders are individuals or groups outside the business, including end users, customers, and investors.

You will need to identify and assess both types of stakeholders in your analysis.

Step 2: Prioritize your stakeholders

Next, prioritize your stakeholders by assessing their level of influence and level of interest. The stakeholder 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 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.

communication matrix
Communication matrix (Click on image to modify online)

The most common stakeholders

Below is a list of common stakeholders and some examples of associated communication strategies.

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 advance or shut down your project(s). This means that you should manage this relationship closely, communicating frequently and requesting and implementing feedback.

Shareholders/investors

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.

Government

High power, probably low interest

The government controls the laws and regulations that could shut down your business or project. Health code inspectors and IRS auditors are examples of government officials that classify as stakeholders. 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 posing a risk to your project.

Senior executives

High power, low interest

Your company’s senior executives make the biggest decision, giving them high influence but limited bandwidth to focus on your project specifically. This means your strategy should be to keep them satisfied. Communicate when necessary, consulting and seeking feedback, to increase their interest in you and your work.

Your co-workers

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 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 like a stakeholder diagram are a great way to communicate your project to your key stakeholders and obtain buy-in. Further, it’s useful to know not only what to communicate, but how often to communicate.

stakeholder analysis

Lucidchart offers numerous templates to help you keep stakeholders updated on new and in-progress projects.

Try it now

Lucidchart

Lucidchart, a cloud-based intelligent diagramming application, is a core component of Lucid Software's Visual Collaboration Suite. This intuitive, cloud-based solution empowers teams to collaborate in real-time to build flowcharts, mockups, UML diagrams, customer journey maps, and more. Lucidchart propels teams forward to build the future faster. Lucid is proud to serve top businesses around the world, including customers such as Google, GE, and NBC Universal, and 99% of the Fortune 500. Lucid partners with industry leaders, including Google, Atlassian, and Microsoft. Since its founding, Lucid has received numerous awards for its products, business, and workplace culture. For more information, visit lucidchart.com.

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