Hari Srinivas
	Policy Tools Series C-029.

Stakeholders are people or organizations that are internal or external to the project who have a vested interest in its success. That interest can have a positive or negative impact in the project management process.

A Stakeholder analysis is a process of identifying and assessing the interests and needs of stakeholders in a project, program, or organization. It involves identifying the stakeholders, analyzing their interests, and evaluating their level of influence and power over the project or organization.

A Stakeholder analysis is a critical first step in the project management flow. It is the process of identifying and understanding the needs, interests, and influence of all stakeholders involved in a project. This information is then used to develop a plan for managing stakeholder relationships and ensuring that their needs are met.

Importance of a stakeholder analysis

Stakeholder analysis is important because it helps organizations identify and understand the interests, needs, and expectations of all the parties involved in a project or decision-making process. By conducting a stakeholder analysis, organizations can identify potential conflicts and opportunities, prioritize stakeholders' concerns, and develop effective communication strategies to engage with them.

This can lead to more informed decision-making, better relationships with stakeholders, and ultimately, greater success in achieving organizational goals.

Steps involved in a Stakeholder Analyisis

The stakeholder analysis is a process that helps identify and understand the stakeholders involved in a project, policy, or decision-making process. Here are the steps to conduct a stakeholder analysis:

• Identify the stakeholders: Make a comprehensive list of individuals, groups, organizations, and entities that are affected by or have an interest in the project or decision. Consider both internal stakeholders (e.g., employees, management) and external stakeholders (e.g., community members, NGOs, government agencies).
• Assess stakeholder interests and influence: Determine the level of interest each stakeholder has in the project and the degree of influence they may have over its outcomes. This can be done through research, interviews, surveys, or consultations.
• Prioritize stakeholders: Rank the stakeholders based on their level of interest and influence. Focus on those with high interest and high influence, as they are likely to have a significant impact on the project's success or failure.
• Analyze stakeholders' needs and expectations: Identify the needs, concerns, and expectations of each stakeholder. Consider their perspectives, goals, values, and potential benefits or risks associated with the project.
• Determine engagement strategies: Based on the stakeholder analysis, develop tailored engagement strategies for each stakeholder group. This may involve communication plans, consultation processes, collaboration opportunities, or mitigation strategies to address concerns.
• Engage stakeholders: Implement the engagement strategies and involve stakeholders in the decision-making process, seeking their input, feedback, and collaboration. Regularly communicate updates and progress to keep stakeholders informed.
• Continuously monitor and adapt: Regularly review and update the stakeholder analysis throughout the project lifecycle. Stakeholders and their interests may evolve, requiring adjustments to engagement strategies or the inclusion of new stakeholders.

It's important to note that stakeholder analysis is an iterative process, and stakeholder engagement should be ongoing and responsive. It helps ensure that diverse perspectives are considered, conflicts are addressed, and decisions are informed by a broader understanding of the stakeholders' interests and needs.

Benefits of conducting stakeholder analysis

Conducting a stakeholder analysis can provide several benefits for a project or organization. Some of the key benefits include:

1. Identifying key stakeholders: Conducting a stakeholder analysis can help identify all the stakeholders involved in a project or organization, including those who may not be immediately obvious. This can help ensure that all relevant parties are taken into account when making decisions.
2. Understanding stakeholder needs and expectations: By analyzing stakeholders, you can gain a better understanding of their needs, expectations, and concerns. This information can help you tailor your approach to better meet their needs and expectations, which can ultimately lead to greater success.
3. Managing stakeholder relationships: Stakeholder analysis can help you identify potential conflicts or areas of disagreement and develop strategies to manage these relationships effectively. This can help build trust and support among stakeholders, which is crucial for the success of any project or organization.
4. Improving decision-making: By taking into account the needs and expectations of all stakeholders, you can make more informed decisions that are more likely to be accepted and supported by everyone involved.

Methods used for stakeholder analysis

There are several methods that can be used for stakeholder analysis, some of which are:

• Power-Interest Grid: This method involves mapping stakeholders based on their level of power and interest in the project or organization.
• Salience Model: This method involves identifying stakeholders based on their level of power, legitimacy, and urgency.
• Network Analysis: This method involves mapping the relationships and connections between stakeholders to understand their influence and impact on the project or organization.
• Multi-Criteria Decision Analysis: This method involves ranking stakeholders based on multiple criteria, such as their level of interest, power, and legitimacy.
• Participatory Methods: This method involves involving stakeholders in the analysis process through surveys, focus groups, or interviews to gain a better understanding of their perspectives and priorities.

Identifying stakeholders in a project or organization

Identifying stakeholders in a project or organization is an important step in stakeholder analysis. Here are some steps you can take:

1. Identify the project or organizational goals: Understanding the goals of the project or organization can help you identify stakeholders who have an interest in the outcome.
2. Brainstorm potential stakeholders: Think about who might be affected by the project or organization, including individuals, groups, and organizations.
3. Categorize stakeholders: Once you have a list of potential stakeholders, categorize them based on their level of interest and influence in the project or organization.
4. Prioritize stakeholders: Prioritize stakeholders based on their level of interest and influence. This can help you determine which stakeholders to engage with first.
5. Engage with stakeholders: Engage with stakeholders to understand their needs and concerns. This can help you develop strategies to address their concerns and build support for the project or organization.

Components of a stakeholder analysis report A stakeholder analysis report typically includes the following components:

Introduction:

Provide an overview of the purpose and scope of the stakeholder analysis report. Explain the importance of stakeholder engagement and the objectives of the analysis.

Methodology:

Describe the methods and approaches used to conduct the stakeholder analysis. This may include data collection techniques, sources of information, and any tools or frameworks utilized.

Stakeholder Identification:

Present a comprehensive list of identified stakeholders, including both internal and external stakeholders. Provide a brief description of each stakeholder and their role or interest in the project or decision.

Stakeholder Assessment:

Evaluate each stakeholder's level of interest and influence. Use a visual representation such as a stakeholder mapping matrixSee figure below to illustrate the positioning of stakeholders based on their influence and interest.

Stakeholder Needs and Expectations:

Outline the identified needs, concerns, expectations, and objectives of each stakeholder. Describe their perspectives, goals, values, and potential benefits or risks associated with the project or decision.

Stakeholder Engagement Strategies:

Propose tailored engagement strategies for each stakeholder group based on their characteristics, interests, and influence. Specify the communication channels, consultation methods, and collaboration opportunities recommended for effective stakeholder engagement.

Mitigation and Action Plans:

Identify any potential conflicts, challenges, or risks associated with stakeholders and propose mitigation strategies to address them. Present action plans or recommendations for managing stakeholder concerns and maximizing positive outcomes.

Stakeholder Engagement Timeline:

Provide a timeline or schedule for stakeholder engagement activities, including key milestones, consultations, and decision points. This helps ensure that engagement efforts are well-planned and integrated into the project's timeline.

Monitoring and Evaluation:

Describe the approach for monitoring and evaluating stakeholder engagement activities and outcomes. Define the indicators and metrics used to assess the effectiveness of engagement strategies and identify areas for improvement.

Conclusion:

Summarize the key findings from the stakeholder analysis, emphasizing the most critical stakeholders, their needs, and recommended engagement strategies. Highlight the potential impact of effective stakeholder engagement on the project's success.

Annexes:

Include any additional supporting materials, such as stakeholder profiles, interview transcripts, survey results, or relevant documents, to provide further context and evidence for the stakeholder analysis.

A Stakeholder Analysis byproduct: Stakeholder Map

A stakeholder map is a visual, four-quadrant influence-interest matrix used in project management to identify stakeholders and categorize them in terms of their influence and interest in the project. A stakeholder map might also be referred to as a stakeholder matrix, power interest grid or stakeholder chart.

The y axis determines the level of interest, from highest on the top to lowest on the bottom-meaning how much the stakeholders are impacted by the outcome of the project. The x-axis of the power interest grid measures the stakeholder's level of influence, or how much the stakeholder can impact the project, from low (left side) to high (right side). Stakeholders are then plotted on this map depending on how they fall on those two metrics, with information such as:

• The name of each stakeholder
• The stakeholder's role in the project
• The stakeholder's level of interest in the project
• The stakeholder's level of influence on the project

References:

• Freeman, R. E. (1984). Strategic Management: A Stakeholder Approach. Pitman.
• Mitchell, R. K., Agle, B. R., & Wood, D. J. (1997). Toward a Theory of Stakeholder Identification and Salience: Defining the Principle of Who and What Really Counts. Academy of Management Review, 22(4), 853-886.
• Bryson, J. M. (2004). What to Do When Stakeholders Matter: Stakeholder Identification and Analysis Techniques. Public Management Review, 6(1), 21-53.
• Reed, M. S., Graves, A., Dandy, N., Posthumus, H., Hubacek, K., Morris, J., Prell, C., Quinn, C. H., & Stringer, L. C. (2009). Who's in and Why? A Typology of Stakeholder Analysis Methods for Natural Resource Management. Journal of Environmental Management, 90(5), 1933-1949.
• Eden, C., & Ackermann, F. (1998). Making Strategy: The Journey of Strategic Management. Sage Publications.