Which term refers to identifying stakeholders and grouping them by interest and influence?

What is stakeholder analysis?

Stakeholder analysis is the process of identifying, assessing, and prioritizing the people who will be affected by your business or project. It’s an extremely useful exercise that can help you to:

• identify individuals and groups who may impact – or be impacted by – your project,
• ensure that all affected parties are recognized and duly considered,
• better understand the people involved, the issues that matter to them, and their expectations and needs,
• group people based on their levels of interest and influence to strategically target your engagements,
• reveal how different groups interact and how those interactions may help or harm your interests,
• recognize your key stakeholders (those with the most interest and influence in your project),
• uncover potential risks, issues, or misunderstandings that could disrupt the project, and
• proactively address concerns to secure social acceptance and improve outcomes.

Why is it important to conduct a stakeholder analysis?

Not all stakeholders require the same amount of attention. A careful analysis will help you identify the stakeholders who support and oppose your project, how strongly they feel about it, and how much they can affect its outcome. This valuable information will help you determine who you need to engage with as the project progresses, and to what extent. By focusing your efforts this way, you won’t spend time and resources unnecessarily… for example, trying to explain the benefits of your project to someone who is already on board.

A thorough stakeholder assessment will help you decide which types of communication and messaging will be most successful. This can help you minimize negative perceptions, amplify positive impacts, and resolve conflicts before they escalate. The knowledge will also help you better target your day-to-day engagements more effectively to achieve the desired outcomes.

When should I conduct a stakeholder analysis?

Stakeholder analysis is an ongoing exercise. If possible, you’ll want to perform your first analysis during the early stages of your project, as it will provide insights to help you proactively develop your engagement strategies.

Over the life of a project, stakeholders will come and go, and people’s opinions may change. Each analysis is a snapshot of a certain point in the project timeline. Repeating your analysis on a regular basis will show you how your stakeholders are evolving over time: who your key stakeholders are, how the needs and expectations of different groups are shifting, and how your relationship with them has changed.

Whether you choose to conduct a new stakeholder analysis every six months or just before each new project stage, be sure to allocate the necessary resources to conduct recurring analyses. With each new analysis, it’s important that you update your stakeholder strategies and messaging accordingly to avoid wasting precious resources on stakeholders and messages that are no longer relevant.

Following a clear, proven methodology can help your team engage in a more strategic, proactive way. Discover the stakeholder methodology advocated by best practices.

How do I analyze my stakeholders?

Knowing who your stakeholders are and what motivates them is vital. Stakeholder analysis identifies the people involved as well as their level of involvement, which can help you determine how you should engage with them.

There are a number of matrices that can be used for stakeholder analysis. You may wish to consider using a combination of models to gain a more thorough understanding of key stakeholder groups and their potential impact on your project. No matter which model you use, the process is similar:

• Identify project stakeholders
• Assess stakeholders (by interest, influence, knowledge about your project, level of support, etc.)
• Categorize stakeholders into groups that share similar interests and needs.
• Identify effective engagement strategies for each group

Identify project stakeholders

The first step in stakeholder analysis is to identify all of the people involved. Stakeholders include any person, company, or institution who can affect, or be affected by, your project; for example: owners, investors, employees, customers, suppliers, government agencies, regulatory authorities, media, landowners, and local communities.

When it comes to identifying stakeholders, previous experience can be a great source of ideas. Review your organization’s historical data from previous projects. Even if you’ll be operating in a new location or working on something new, you don’t have to start over. Look for projects that are similar to your own and identify stakeholders who played key roles. There’s a good chance the same stakeholders – if not the same individuals, then people in similar roles – will impact (or be impacted by) your current project.

Another great way to identify stakeholders is by conducting a team brainstorming session. Different people have worked on different projects and had different experiences, so their insights can be invaluable when it comes to stakeholder analysis. Be sure to involve people from other departments within your organization, as a cross-functional approach can help ensure that you don’t overlook anyone. Ask your team to come up with the longest list they can, and at the end of the session simply eliminate suggestions that don’t fit. It’s better to have too many options and need to remove some than to forget to account for affected parties!

Looking for a stakeholder data management system baseline? Read the near-real-life story of a stakeholder engagement team leader as she tries to improve her organization’s stakeholder management.

Understanding stakeholder motivations

Everyone has their own reasons for their personal opinions and actions. Understanding these motivations will help you determine the types of engagements, communications, and even arguments that will be most persuasive. The goal of stakeholder analysis is to identify and interpret these motivations so they can be adequately addressed. Let’s look at some of the factors involved:

• Financial interests: Will the stakeholder make or lose money because of the project?
• Moral and ethical values: Does the stakeholder believe the project deserves social acceptance?
• Rights: What legal rights, such as occupational health & safety, are affecting the stakeholder’s opinion
• Religious beliefs: Are religious beliefs involved
• Political opinions: Could political opinions be triggering support or opposition to the project?
• Business interests: Does the stakeholder expect the project to increase or decrease business revenue?
• Knowledge: How much does the stakeholder know about your project? (Support is often directly proportional to knowledge.)
• Demographics: Factors like age, income, and access to employment opportunities can greatly affect attitudes about your project.
• Environmental stewardship: Is the project’s environmental footprint bringing stakeholders on board, or driving them away?
• Value of ownership: Does the stakeholder stand to gain or lose something of value, such as their farm or quiet neighborhood?
• Communication preferences: Are you communicating with stakeholders in a way that’s meaningful to them? Some stakeholders prefer online communications, while others may value face-to-face meetings.

Assess and classify your stakeholders

You might begin your stakeholder analysis with a list of thousands of individuals, but when you review the list, you will probably find that most of your stakeholders fit into identifiable groups with similar priorities or interests.
There are a number of different models that can be used to classify and analyze stakeholders. For example:

• The Power/Interest Grid compares stakeholders based on their authority and involvement in the project. The simple matrix shows a stakeholder’s level of influence on one axis, and how much your organization impacts (or is impacted by) these stakeholders on the other. This helps you focus your time and energy on people who can contribute most to the project’s success or failure.

• The Salience Model assigns stakeholders to one of seven classes, which are prioritized based on their levels of power, legitimacy, and urgency. All stakeholders fall into three overlapping circles, as in the accompanying Venn diagram. Those who fit into more than one category (indicated by the overlapping sections) require the most attention.

• The Stakeholder Knowledge Base Chart evaluates stakeholders’ levels of awareness and support. This helps teams identify and educate those who are uninformed (or misinformed), and to seek ways to manage risks with those who do understand the project but still oppose it.

Stakeholder mapping is an extremely helpful tool that can help you visualize these relationships.

What’s the difference between primary stakeholders, secondary stakeholders and key stakeholders?

Primary stakeholders are the people most affected by your project. Examples can include individuals who will need to be relocated, people that will be employed by the project, or those who will benefit directly from the development of new infrastructure.

Secondary stakeholders can be harder to identify because they are indirectly affected by the project. Their motivations may also be less obvious. Examples include your organization’s customers, minority shareholders, or members of an advocacy group.

Key stakeholders are the people who have the most power or influence; they are generally considered vital to the success of your project. Not only do they have a vested interest in the project’s outcome, but they have the power to seriously impact its delivery as well. Key stakeholders need to be managed closely.

Note: It’s a good idea to keep an eye on highly interested stakeholders with low power. These stakeholders may ally themselves with high power/low interest groups, thereby becoming key stakeholders.

How to prioritize stakeholders

Now that you’ve identified your stakeholders and evaluated their levels of involvement, the next step is to prioritize them and create an engagement plan for each group.

Different stakeholder groups require different engagement strategies, in terms of frequency as well as type of interaction. Be sure to consider the quality of your existing relationship with the stakeholders, how they feel about your project, and which issues are most important to them. Ask yourself who needs to know what, and when, and identify strategies that will be effective for each group.

How you prioritize your stakeholders may depend on the nature of your project, available resources, and timeframe. For instance, you may wish to focus the bulk of your engagement activities on stakeholders who are unfamiliar with your project but who stand to benefit from it, so that they can become powerful advocates.

It can also be helpful to establish a tier system to guide your engagements. Here’s an example.

Let’s say you’re part of a Government Relations team that regularly engages with officials about a certain policy issue. As you conduct your stakeholder analysis, you decide to assign your government stakeholders a priority level based on their influence and importance to your cause:

Level 1 Stakeholders will include highly ranked officials like Ministers, Members of Parliament, Governors, Senators, and Members of Congress. You decide to engage with these officials on a monthly basis.

Level 2 Stakeholders will include people like local elected officials who you need to engage with for the same purpose, but not as often. Your team will engage with these people quarterly.

And finally, Level 3 Stakeholders will include people who aren’t directly involved but who need to be kept informed about your efforts, like directors of community organisations and committee leaders. You decide to update them annually.

Don’t forget that stakeholders’ interests, expectations, and perceptions are dynamic; they can change quickly and unpredictably. Be sure to monitor changes to your stakeholder’s positions over time and adjust your strategies to account for any new developments. This will help you keep your stakeholder analysis – and the strategies that stem from it – up to date!

Use fit-for-purpose tools to extract valuable insights from your stakeholder analysis

Advanced mapping tools like those found in Borealis software will give you even greater insights into the individuals and organizations who influence your project.

To learn more about stakeholder mapping in Borealis, check out the stakeholder mapping feature or talk to an expert today!

Now that you have identified and analyzed your stakeholders, you’re ready to determine your communication strategies and put your stakeholder analysis into action. Download our step-by-step guide to creating a solid stakeholder engagement plan.

Which term refers to identifying stakeholders and grouping them by interest in influence?

What is stakeholder interest and influence?

What is the technique used to identify stakeholders?

What does it mean to identify the stakeholders?