By: John G. Davis, P.E.
University of Wisconsin – Madison
A project stakeholder is any individual or organization with an interest in or influence on your project. A stakeholder can be internal (e.g. project sponsor, management team, functional departments, other project teams, employees) or external (e.g. customers, regulatory/government agencies, vendors, interest groups, the public, the community). Too often, project teams ignore their stakeholders or assume that they already know their stakeholders’ needs or, worse yet, that they know more than their stakeholders. This is a very dangerous trap to fall into. Project teams should talk to their stakeholders directly. Many stakeholders have the power to aid or thwart project success. Failure to identify stakeholders and their needs and expectations may lead to project failures. Therefore, spending time in the initiation phase of a project to perform a stakeholder analysis is critical.
The first step in a stakeholder analysis is to identify who your stakeholders are. This is typically achieved with a brainstorming session. Think of all of the people who are affected by your work, who have influence or power over it, or who have an interest in its successful or unsuccessful conclusion. Identify relevant information for each stakeholder, things like their particular interest in the project, their role in the project, their level of authority, and their needs and expectations of the project. It is equally important that you also understand the priority that each stakeholder places on the triple constraints (time, cost, quality). Ask them to clarify the driver, middle constraint and weak constraint. This will help you and your project team prioritize corrective actions to exploit the weak constraint when you begin to see early warning signs of poor project performance.
Next, identify the potential impact or support of each stakeholder. This can be done fairly quickly using the subjective measures of high and low to help categorize stakeholders and determine where project teams should focus their stakeholder management efforts. The horizontal axis of the grid identifies the stakeholder’s level of interest and measures how much they will be affected by the outcome of the project from low to high. The vertical axis of the grid identifies the stakeholder’s level of power and is a measure of how much they can affect the outcome of a project from low to high. The resulting 2×2 grid will have four squares.
- The top left is high power, low interest. These stakeholders should be kept satisfied.
- Top right is high power, high interest. These stakeholders should be managed very closely.
- Bottom left is low power, low interest. Stakeholders in this square should be monitored.
- Bottom right is low power, high interest. Keep these stakeholders informed.
A project manager should maintain engagement with stakeholders and customize his or her communication based on the output of the stakeholder analysis. Managing stakeholder expectations is imperative. Furthermore, the project manager’s goal should be to leverage stakeholder relationships and build coalitions that foster project success. Warning signs that your stakeholder management is suffering include missed deadlines, scope creep, confusion, conflict, and churning.
It should not be a stretch to recognize the additional benefits of performing a stakeholder analysis. The outputs from a stakeholder analysis are key inputs into communications, risk, and scope plans.
Stakeholder analysis is important because it helps an organization achieve its strategic objectives by involving both internal and external environments and by creating a positive relationship with stakeholders through good management of their expectations. Good stakeholder analysis and management is a key component of a healthy project environment. Never underestimate the importance of performing a stakeholder analysis. An ignored key stakeholder may view your project as a failure—even if you and your project team delivered a high quality product or service under budget and ahead of schedule.
More information on UW–Madison’s Engineering Professional Development project management courses, contact program director John Davis at 608-2652-8724 or firstname.lastname@example.org