How to Conduct Stakeholder Analysis in 3 Steps

In business, stakeholder analysis is a project management strategy for identifying and understanding all the individuals and groups who have a vested interest in a project. The purpose of the stakeholder analysis process is to determine all the [key players](https://www.masterclass.com/articles/stakeholder-theory-guide) affected by your company's project execution and develop a strategy that supports the needs of your different stakeholders and leads to a successful project. Stakeholder analysis is the first step in stakeholder management, coming before you develop a stakeholder communication plan. A stakeholder is any person or group who impacts or is impacted by an organization’s actions. There are two primary types of stakeholders: 1. __Internal stakeholders__: Internal stakeholders operate within an organization and include general team members, project managers, business owners, and shareholders. 2. __External stakeholders__: External stakeholders are not part of the organization but are affected by the organization’s actions. Examples of external stakeholders include customers, suppliers, financiers, local communities, trade associations, competitors, the government, and society. Conducting a project stakeholder analysis is essential to help guide a project from start to finish. Project stakeholder analysis can help you: - __Define your project__: Once you identify what's essential to your most powerful stakeholders, you can use their input to shape the details and scope of your project. Plus, when your stakeholders know you're considering their preferences from the start, they'll be more willing to take some concessions down the line. - __Anticipate problems__: Stakeholder analysis techniques let project leaders anticipate adverse reactions from specific stakeholder groups. Being prepared for potential speed bumps in a project's roadmap helps the project team reduce the impact of disruptions and address the issues of concerned stakeholders. - __Create assurance__: Stakeholder analysis helps build the assurance that your stakeholders need to help you produce project success. Boost your team’s productivity by ensuring they feel valued and give your financiers the confidence that their money will be spent effectively. Before you develop a stakeholder communication strategy, you must first conduct a stakeholder analysis. Stakeholder analysis isn't a long process—it only takes three steps. 1. __Identify your project’s stakeholders__. When brainstorming a list of your stakeholders, remember to think about your internal stakeholders working directly on your project and the external stakeholders affected by your project. Examples of common stakeholders include company CEOs, project team members, project sponsors, project managers, consultants, sales and marketing departments, shareholders, consumers, the media, labor unions, suppliers, the government, creditors, and local communities. 2. __Build a power and interest matrix to determine stakeholder priority__. Next, it's essential to decide which stakeholders' interests you need to prioritize to maximize stakeholder support and minimize stakeholder disruptions. One of the easiest ways to establish a prioritization system is by constructing a power/interest grid, which sorts each stakeholder based on their level of influence and interest in your project. 3. __Convince your key stakeholders to buy into your project__. Now that you know the project’s interested influencers, establish communication to earn their support for your project. Before you reach out, ask yourself if each stakeholder is likely to have a positive or negative viewpoint on your project. If the answer is negative, consider the likely reasons for their opinion, then brainstorm talking points and prepare metrics to convince them of your project's benefits. Once you make contact, listen to their wants, needs, and concerns, and think about how you can work together to benefit each other’s goals. Categorize each of your stakeholders into one of four squares on a power/interest grid and follow the corresponding instructions. - __High Power + High Interest = Manage Closely__. Stakeholders who fall in this category are your most important stakeholders, and you should make it your top priority to support their desires. An example of a stakeholder in this category might be your project's financier. - __High Power + Low Interest = Keep Satisfied__. Due to their level of influence, these stakeholders require you to put in enough effort to keep them content, but since they don't have a strong interest in your project, you don't need to go above and beyond to please them. An example of a stakeholder in this category might be the government. - __Low Power + High Interest = Keep Informed__. Maintain a constant flow of information, so this group of stakeholders are in the loop and feel heard. While they may not have enough power to boost or derail your project significantly, they can contribute excellent knowledge to your cause. An example of a stakeholder in this category might be an individual consumer of your project. - __Low Power + Low Interest = Monitor__. These are your least influential stakeholders, and they typically require the least attention. An example of a stakeholder in this category might be a local community member. Get the [MasterClass Annual Membership](https://www.masterclass.com) for exclusive access to video lessons taught by business luminaries, including Bob Iger, Chris Voss, Robin Roberts, Sara Blakely, Daniel Pink, Howard Schultz, Anna Wintour, and more. Whether you're developing a business or a personal project, stakeholder analysis is a valuable tool for gaining support from all those affected by the project.