Project success depends largely on the people involved. You may get to pick some or all of your project team, but you won't get to choose every stakeholder. As a project manager, it's your job to work with the stakeholders you've got and to understand what makes them tick. This is essential to ensure maximized engagement and minimized problems. The key is found in the stakeholder analysis. Read on to learn how it works.
Analyzing Stakeholder Role, Interest and Influence
Every project has "stakeholders", forming the "human element" of the project management paradigm. As the name implies, a project stakeholder is any individual or entity with a "stake" in the project at hand (i.e. something to lose, and something to gain). This "stake" drives behavior, and behavior drives results.
If you want your project to succeed, with minimal conflicts, you need to get every stakeholder fully "engaged" and motivated . Engagement and participation instills pride of ownership, leading to better results, delivered in a more productive manner. The ability to "engage" begins with a full understanding of stakeholder identity and assigned role, vested interest, accountability, and the power to influence resulting outcomes. In procedural terms, this "understanding" is obtained through the stakeholder analysis.
Key Steps to Identify, Analyze and Act
The project stakeholder analysis is performed in four (4) steps as detailed below:
Step 1: Who are your project stakeholders?
The first step in the stakeholder analysis process is to identify "the stakeholders" according to their primary project "role". It is important to consider stakeholders from both an organizational and individual point of view. Organizational stakeholders include the "entities" engaged in the project, considering departments, workgroups, teams, committees and related entities. Individual stakeholders are defined by the "people" (and personalities) involved in the project (the human element). Stakeholder identification can be greatly simplified through the use of the following standardized categories:
- Beneficiary Stakeholders: Group/individual receiving a benefit from the project.
- Executing Stakeholders (Management): Group/individual responsible for managing execution.
- Executing Stakeholders (Participants): Group/individual responsible for project execution.
- Oversight (Sponsor): Group/individual responsible for oversight and sponsorship.
- Oversight (Advisor): Group/individual responsible for advising and overseeing project execution.
Step 2: Who has a vested interest in the outcome?
Once stakeholders have been identified, it's time to consider the "interest" each has in the project (again from both a "project" and "process" point of view). Interest is defined by impact and accountability:
Interest Determined by Impact: Every project has consequences, to be realized in a variety of ways and degrees (operational, financial and personal). Projects can change the way work is performed, lessen responsibility, add responsibility, and the like. Impact can be felt in numerous ways, both obvious and subtle. The more serious and significant the impact, the more "interest" in the project (and/or management process). To streamline this assessment, "interest" can be rated at three (3) levels:
- Maximum Impact: The project will have significant impact on the group and/or individual.
- Moderate Impact: The project will have measureable impact on the group and/or individual.
- Minimal Impact: The project will have minor impact on the group and/or individual.
Interest Determined by Accountability It goes without saying that accountability is a great motivator. Accountability is defined by the degree to which a stakeholder will be held responsible for their role in the project, whether for the tasks assigned, decisions made, support provided, participation, attitude, and overall contributions. The more "accountability" the greater the interest.
- Maximum: The stakeholder has significant accountability for the project and/or process.
- Moderate: The stakeholder has measureable accountability for the project and/or process.
- Minimal: The stakeholder has minimal accountability for the project and/or process.
Step 3: Who has the power to make a difference?
It takes a lot of effort to make a successful project, but it only takes a small act to undo that effort and take things in the wrong direction. People (and groups) have the power to steer projects to success or divert the outcome in unwanted ways. This is the two sided coin known as "stakeholder influence". On the up side, active stakeholder engagement will certainly have a positive influence on the project and/or process (and this possibility must be cultivated). On the down side, stakeholders also have the capacity for negative influence, realized in a myriad of ways (i.e. failure to perform, failure to decide, failure to support, procrastination, withholding information and the like). To facilitate the stakeholder analysis, influence "potential" is largely determined by the strength of the probable consequences:
- Strong Influence: The stakeholder has significant capability for positive/negative influence.
- Moderate Influence: The stakeholder has measureable capability for positive/negative influence.
- Weak Influence: The stakeholder has minimal capability for positive/negative influence.
Step 4: Putting it all together to determine stakeholder "engagement" and management priorities.
The final step in the stakeholder analysis process is to use resulting data to identify and select "priority" stakeholders as a focus for engagement and management strategies. "Level 1" priorities will likely encompass those stakeholders with "maximum" impact and accountability and "strong" influence capability (both positive and/or negative). Surrounding project conditions (time, funding, risk and visibility) will determine the extent to which related engagement strategies must also address impact, accountability and influence of lesser significance.
Planning Tip: Don't forget to examine the lessons learned from previous projects as a guideline to determine "priority stakeholders" and to refine related strategies.
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