Stakeholder Analysis: Why It's Important and How to Do It

Projects are constantly influenced by different people, either directly or indirectly. These groups are known as stakeholders.

Those who know what stakeholders want can move things along whereas critics can take the wind out of a project's sails. Whatever the case, performing a stakeholder analysis will show where everyone stands.

In this guide, we'll teach you how to perform a stakeholder analysis and tell you everything you need to pay attention to.

The German Institute for Standardization's ​DIN 69901-5:2009 defines stakeholder analysis as "An assessment of all project participants concerning their influence upon the project and its positioning (positive or negative)."

Said differently, a stakeholder analysis is a systematic classification of all those interested in a project that's performed to anticipate their impact upon and reaction to decisions.

Stakeholders are those who have an interest in a particular project and can influence its course. These can be individuals or groups of people. Most of the time, a differentiation is made between internal and external stakeholders.

Internal stakeholders are those within a company, organization, or business. Some common internal stakeholders include:

External stakeholders are those who aren't directly employed by the business or organization undertaking the project but are still impacted by it. This includes people, groups, or institutions, such as:

A stakeholder analysis helps to identify all of a project's stakeholders along with their requirements, needs, and desires. By understanding their opinions, you'll be able to determine who the supporters and detractors are.

Stakeholder analyses are essential for a business's long-term viability. Ignore them at your peril, since doing so can cause projects to fail.

At the same time, those who effectively use stakeholder analyses can sustainably improve their project's image. Simply interacting with stakeholders as part of an analysis can help them feel heard and included.

With that said, a stakeholder analysis only provides a snapshot. Positions can and do change frequently. This makes it sensible to regularly perform stakeholder analyses.

Stakeholder analyses apply to all kinds of projects. They're especially good for comprehensive construction or infrastructure undertakings. These projects have a lasting impact on nature, the environment, and people living nearby.

Should you neglect to perform a stakeholder analysis and suffer from poor communication, your project can be negatively impacted. In the worst case, it might fail.

Large businesses and concerns include stakeholder analyses in their sustainability reports. These analyses classify stakeholders and address their impacts on groups.

For many projects, a stakeholder analysis is only performed during the planning phase. It's better to consistently perform stakeholder analyses so that you can check the project's topicality, and adjust it if needed.

This is important since opinions and stances change over a project's course. In addition, mistaken conclusions or summations made at the beginning of a project can be corrected as it develops.

A stakeholder analysis is a multi-step process, and typically consists of these steps:

To identify the relevant stakeholders, you'll need to be familiar with a project's timeframe and its most important milestones. Only then can you meaningfully interact with stakeholders.

A good place to start is by distinguishing between individuals and groups. The first should be identified by name and function (i.e. John Smith, data privacy coordinator).

For groups, it becomes somewhat more complicated to find the right contact person or opinion leader/shaper. If dealing with an organization or association, this can be easy, since these typically have hierarchical structures.

However, for informal groups, such as residents or concerned citizens, you might need to do additional research.

While core stakeholders are important, make sure that you consider the entire environment. To maintain an overview, note all stakeholders. If you identify a large number of stakeholders, you can group them by interest.

There are different ways to collect information for your stakeholder analysis. Some of the most common include:

It's advisable to start as early as possible with interviews and workshops. Conversations should be just that, and not seem like interrogations. Make sure that stakeholders feel heard and that they're being taken seriously.

Discussions should be structured, with ample opportunities for stakeholders to voice their wishes and hopes, as well as their criticism and fears.

The more open and meaningful the conversation, the better the results will be. Apart from that, every project management team can tailor the approach to their needs: Individual consultations, large Q&A sessions, or focus groups.

It is advisable to not invite groups with different interests to the same meeting. A better approach is to gather groups with similar interests and have them jointly voice their feelings and opinions.

In addition, interviews have an advantage over workshops in that you'll hear opinions from more introverted stakeholders who might be intimidated by large group settings.

Don't forget to record the conversation(s) or take extensive written notes to save the information you gather.

Apart from direct conversations, you can also use other sources of information, such as written reports from earlier projects. Public posts on social networks can also yield plenty of insight.

As soon as you've identified the stakeholders and collected information about them, you can evaluate it with a matrix. To do this, input the following data:

With this data, it becomes possible to see where conflicts might emerge and what sort of impact they can have. Determining which factors to include depends entirely on your project.

Some projects require the publication of a stakeholder analysis. In these cases, it's important that the analysis's wording doesn't reveal an individual or group's opinion or take any position on it.

Instead, stakeholder analyses intended for public consumption should use neutral language. If necessary, an external/public version of the analysis can be prepared.

To clearly and accurately present the analysis's results, visualize the stakeholders along with their relations and stances. This is easiest with a stakeholder map, also known as a power interest grid.

Stakeholders are depicted in the stakeholder map as circles, the size and position of which indicates their influence. Relations between stakeholders can also be shown on the stakeholder map.

You can group stakeholders into different categories to reflect their influence on the project:

Participative stakeholders should be actively involved in the project, since they support it and want it to succeed. They are important opinion formers during discussions and decision-making sessions.

Discursive stakeholders should also be taken just as seriously as participative stakeholders. However, owing to their limited influence, this group should be less involved in the project's development.

How you interact with restrictive stakeholders is particularly important. This group likely won't want to be involved in the project, since they don't support it.

At the same time, this isn't an excuse to ignore them! Attempts should be made to convince them of the project's virtues. In addition, keep them up to date about the project's progress. 

For external presentations, make sure that your stakeholder map is anonymized.

Stakeholder analyses can help many projects achieve successful outcomes. However, they also have risks and if performed incorrectly, can negatively impact a project.

A stakeholder analysis is an important component of any project's success. It starts by identifying internal and external stakeholders who are involved either directly or indirectly with the project, as well as their opinions.

A successful stakeholder analysis can help to focus project communication on stakeholders. Do your best to prevent sensitive information resulting from the analysis from being published.