One of the major work a project manager does is stakeholder’s management. There are multiple individuals involved in a project and Project manager being the integrator and centre of project, has to satisfy all the stakeholders within the boundaries of the project. This is the reason stakeholder’s management and analysing the critical stakeholders in a project is very important for the success of the project. In this article I shall touch upon basics of Stakeholder’s analysis and the reasons, why it’s required.
Who is a stakeholder?
As per PMBOK® version 5
An individual, group, or organization who may affect, be affected by, or perceive itself to be affected by a decision, activity, or outcome of a project
Anyone whose interest is impacted either positively or negatively is called stakeholder in the project. While doing stakeholder management, project manager deals with human beings and human beings have their interests. It’s very difficult to understand the interests of all the individuals involved and work as per it. Also it’s very difficult to mould the human beings interests in favour of project.
This is the reason stakeholder management has so much importance in the project and Project manager has to focus on it.
What is Stakeholder Analysis?
As per PMBOK® version 5
“Stakeholder analysis is a technique of systematically gathering and analysing quantitative and qualitative information to determine whose interests should be taken into account throughout the project. It identifies the interests, expectations, and influence of the stakeholders and relates them to the purpose of the project”
When we say systematic gathering and analysis, we need this to understand the interests better and also to understand how critical that stakeholder is. There are majorly three dimensions over which this analysis is done i.e. Interests, influence and Power.
Any stakeholder analysis is a three step approach
Identify: Identify the characteristics of the stakeholders i.e. roles, departments, interests, knowledge, expectations
Analyse: Analyse the positive and negative impact of these stakeholders and classify them so that you can make an appropriate strategy for the stakeholders.
Assess: Understand how key stakeholders are likely to react or respond in a situation. This assessment will help Project manager to work towards enhancing positive impact and mitigating negative ones.
We shall discuss few of the common stakeholder analysis techniques to understand this better.
Stakeholder Analysis techniques
The techniques suggested for stakeholder analysis are two dimensional grids to identify zones for stakeholders and then create the strategy for management.
It’s assumed that before doing stakeholder analysis, a list of the stakeholders is already available. The grids available along with their definitions as per PMBOK® are:
- Power & Interest : grouping the stakeholders based on their level of authority (“power”) and their level or concern (“interest”) regarding the project outcomes;
- Power & Influence: grouping the stakeholders based on their level of authority (“power”) and their active involvement (“influence”) in the project
- Influence & impact: grouping the stakeholders based on their active involvement (“influence”) in the project and their ability to effect changes to the project’s planning or execution (“impact”)
Let’s take one grid as example and understand how it helps
Above is one of such grids which can help in doing stakeholder’s analysis. This is Power/Influence grid.
If we look at this grid, there are four section
|Most critical lot of stakeholders. These stakeholders are high in power and involvement and has to be monitored very closely
|High power stakeholders are still important as they have the capability of turning things in favour and opposition. So this category of stakeholders should be informed at appropriate level
|A stakeholder low in power is a breather but if s/he has high influence, involvement is more. It’s important that these stakeholders works in favour of Project Manager or for that matter in favour of Project. That’s the reason it’s important to take this category of stakeholders satisfied.
|This category is where the high level monitoring should be enough because power and influence of the stakeholders are both low.
So what did we achieve after completing this stakeholder analysis?
- We have a category (out of four) for all the stakeholders already identified
- Project Manager has a view where to focus more and where to focus less
- Project Manager knows certain critical stakeholders he has to ensure close monitoring without a miss so that there is no adverse effect on the project
Similarly any of the above mentioned grids can be chosen based on the organization and then stakeholder’s analysis can be conducted.
Stakeholder’s analysis also helps in identifying stakeholder’s inter-relationships which are important to know and leverage for the benefits of the project.
Why Stakeholders Analysis required?
If we understood the above discussion, we can answer this question very well. Few obvious outcomes are:
- To deal with human’s it’s important to know them for the success of the project
- Project Manager has limited bandwidth, He should be aware where to focus how much
- Project success is in the hands of stakeholders, effectively we know, better we can work towards taking them along for project success
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Project involves humans and when it comes to human beings, it’s very important to understand and analyse the needs and behaviours of humans so that required focus can be routed in right direction. A Project Manager not good at stakeholder management can’t run a successful project for sure as individuals responsible for the success and failure are not with you. Therefore it’s very important for Project Manager to understand the stakeholders and analyse then using an apt technique and then work towards making strategy as per the outcomes.
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