How to run a stakeholder analysis

Every project is made up of tasks. And these tasks run to the beat of a very important drum: stakeholders and their approval. 

Sure, they’re not always easy to win over — but there’s a reason for that: they’re there to keep investments profitable and the project aligned with broader business goals. So try and think of them not as roadblocks, but as necessary quality control checkpoints who have the potential to turn into your biggest cheerleaders. 

All you need to do is create a business case they can’t refuse, then keep them engaged throughout the project. And to do that, you need to understand their needs in relation to yours. Enter: the stakeholder analysis. Let’s dive in! 

What is a stakeholder analysis?

When you start any project, you need to know who’s involved and who it’ll impact. These individuals are what’s known as stakeholders. They can be internal and external; important and not so important. But all need careful consideration.

A stakeholder analysis is the process of identifying these people before project kick-off, then grouping them based on their interest and influence. 

The goal? To work out the best way to engage with each group throughout the project’s lifecycle. This has two benefits: first, it keeps everyone on the same page. Secondly, it helps you keep your communication productive. 

What is a stakeholder, and why are they a big deal?

A stakeholder is a person or group who has a stake in the outcome of your project. They can be internal, like team members and managers — or external, like customers, investors, and members of the public. 

Essentially, anyone who has their finger in the project pie is considered a stakeholder. And they matter because their influence can shape the trajectory of your project. 

They are gatekeepers. Without their go-ahead, your project’s got no funding, no support, and ultimately, no purpose. For these reasons, getting them on side is arguably the single most important thing a project manager can do.

A real-world example

Imagine you’re going to build a new train station. You’ve created a budget, secured the materials, and built a business case that sets out why the project needs to happen. 

Now what? 

Well, first you need to get the support of your manager or team. They’re stakeholders. Then you need to secure a budget, and the go-ahead from investors. More stakeholders! Then you need to negotiate with suppliers and regulatory bodies (stakeholders again), as well as local councils, members of the public affected by the build, those who will use the service, and even media personnel to garner good press. 

All of these groups are — you guessed it — stakeholders too. If you overlook just one of these sets of people, they have the power to derail (no pun intended) your shiny new train station, whether through strike, withdrawal of funds, protest and petition and more. This is why they matter.

What’s the point of stakeholder analysis?

You want resounding stakeholder support. And the way to get that is to understand their needs. This proactive approach helps nip conflicts in the bud. 

It’s also about prioritizing. Not all stakeholders are equal in terms of their influence and interest. Running an analysis helps you focus your efforts on these VIPs. This means more energy channeled towards where it makes a difference — you’re engaging people in the right way. 

A stakeholder analysis:

• Helps you work out who’s important and what they care about, as well as rally up their support 
• Offers a proactive, tailored approach that lowers misunderstanding and conflict 
• Helps you prioritize so you can focus your efforts on those who matter most 
• Ultimately leads to a smoother project with a higher chance of success.

Stakeholder analysis vs. stakeholder mapping

Stakeholder analysis is an exercise in defining and understanding your stakeholders. Stakeholder mapping, on the other hand, is the process of plotting these stakeholders on a grid based on their level of interest and influence. It’s usually part of the wider analysis process. The former is in depth; the second is a snapshot view.

Here’s a quick comparison between the two.

	Stakeholder analysis	Stakeholder mapping
Purpose	To understand stakeholder interests, influence, and needs	To visually represent stakeholder priorities
Method	Detailed research and analysis	Creating a visual grid or map
Focus	In-depth information	Quick overview
Outcome	Engagement strategies	Visual prioritization
When to Use	Throughout the project lifecycle	During planning and review phases

How to run a stakeholder analysis

Now let’s get down to business. Feel free to flex the following to suit your business and project, but here are the broad strokes to follow.

1. Identify your stakeholders

No prizes for guessing the first step! You need to identify everyone — and we mean everyone — who will be involved with, or affected by, your project. These could be investors, advisors, teammates, members of the public, or even family members. Get a wide range of people involved in this stage because they’ll undoubtedly consider people of groups you’d miss working alone.

So — there are two primary categories of stakeholders: internal stakeholders and external stakeholders.

Internal stakeholders are those within your organization. These can include:

• People on your team: Those actively working on the project, whose roles and workloads are directly shaped by its outcomes.
• The boss and board: Executives and department heads who need to see how the project fits with the broader organizational strategy. Their support is important for getting the resources you need, plus strategic direction.
• Employees: Even if they’re not particularly involved in the project, they might be affected by the results.
• Internal clients/users: Departments or people within the organization who will be impacted by the project.

External stakeholders are those outside your organization. These can include:

• Customers: The people who will use the product or service.
• Suppliers and vendors: Companies or individuals providing goods or services critical to the project. 
• Investors: The people who provide financial support. They’ll be interested in ROI most of all.
• Regulatory bodies: Government agencies or industry regulators that make sure your project complies with relevant laws and standards. 
• Partners and affiliates: Other organizations or entities collaborating with you on the project. 
• Community groups: Depending on your project, local folk might be affected and need a say. 
• The media: In some cases, media coverage can have a massive impact on public perception and stakeholder sentiment, making their role a big one to consider.

2. Group your stakeholders according to priority

After identifying your stakeholders, your next port of call is to group them according to their priority. This helps you understand where to focus your efforts and resources. 

A stakeholder matrix (aka a ‘power-interest grid’) is a really simple tool for categorizing stakeholders based on their level of influence/interest. The matrix typically has four quadrants, which are as follows:

1. High influence, high Interest: These are your VIPs. They have a lot of power over the project, and they’re highly interested in its outcome. Examples include senior management, major investors, and key customers. Engage them closely and regularly.
2. High influence, low interest: Lots of power but low-to-no interest in the details. Examples include regulatory bodies or senior execs from other departments. Keep them satisfied with ‘big picture’ updates and involve them in key decisions only.
3. Low influence, high interest: These ones have a lot of interest, but little sway. Team members and internal users often fall into this category. Keep them informed and engaged, because their support can influence the day-to-day operations of the project.
4. Low influence, low interest: These stakeholders have little power and interest. They might include peripheral partners or minor suppliers. Monitor them with minimal effort, keeping them informed about key events, but not overwhelmed with TMI.

Image source 

How to group stakeholders in 5 easy steps

1. Assess influence and interest: For each stakeholder, work out their power over the project and their investment in the the outcome. Consider things like decision-making power, financial stake, and how directly they’ll be affected by the project. 
2. Map them on the matrix: Place a dot representing each stakeholder in the corresponding quadrant of the matrix. This visual representation helps you see at a glance where to focus your efforts. 
3. Prioritize engagement: Develop strategies for engaging each group based on their position in the matrix. The high influence/high interest people will want regular meetings and in-depth updates. For low interest/influence folks, monthly progress reports might be sufficient. 
4. Review and adjust: Stakeholder priorities can change over time, and you’ll probably want to adjust your dots as you learn more about your stakeholders in the following stages of the analysis. Regularly review your matrix and adjust your strategies to keep everyone aligned with stakeholder needs and goals. 

3. Understand stakeholder needs

Working relationships are so much easier when you know who you’re talking to, including what they want, and how they prefer to communicate. 

This stage lays the foundation for just that, so give it due care and attention. There might be a bit of back-and-forth between this rage and the mapping stage. Staying flexible is all part of the discovery process.

• Arrange meetings: Set up one-on-one meetings/small group discussions, either in person, via video calls, or through surveys. Flexibility helps you get the best insights, not to mention keeps your stakeholders comfortable.
• Ask open-ended questions: Encourage stakeholders to share their thoughts with questions like:
  • What are your main concerns about this project?
  • What do you hope to achieve?
  • How would you like to be involved?
  • How often do you want to hear from us?
• Listen carefully: Engage ‘active listening’ mode. Or in other words, pay close attention to their responses, noting recurring themes or specific concerns.
• Analyze interests and influence: Think about what each stakeholder cares about most, and their power to affect the project.
• Create stakeholder profiles: Create a kind of portrait or profile for each stakeholder. Include their role, interests, influence, expectations, preferred communication methods, and any specific concerns they might have.
• Assess risks and opportunities: Identify potential risks and look for opportunities where stakeholders can provide all-important support, resources, or insights that benefit the project. A SWOT diagram will be useful here.
• Develop engagement strategies: Tailor communication and interaction plans for each stakeholder, and monitor and adapt as needed.

3. Get buy-in from stakeholders

Now you know who the key players are, and what their interests are, it’s time to schmooze. And you need to be strategic about it. Here are the steps to follow. 

• Highlight the benefits: Sell the sizzle, not the steak! Or in other words, sell them how the project will benefit them, rather than overloading them with details. Focus on aspects that align with their interests and show them how their involvement will help achieve these benefits.
• Address concerns: Be receptive and proactive with any concerns. Anticipate as many as you can before going into the meeting, and support with evidence, data, and examples to alleviate their worries and demonstrate the project’s value. For any surprise concerns, thank them, and either answer on the spot or take the question away with you with a promise to return with an answer as soon as possible. 
• Demonstrate ROI: For stakeholders focused on financial outcomes, provide a clear return on investment (ROI). Use metrics, projections, and case studies to illustrate the financial benefits.
• Show Impact: Draw attention to the positive impact your project will have on the organization/community/industry. Support your claims with watertight data and testimonials. 
• Use influence: Engage decision-makers and influential stakeholders to champion your project. Getting them on your side means they could act as advocates on your behalf. 

• Personalize communication: Stakeholders are not one big homogeneous group! Tailor your communication to suit each their needs, including varying your channels, tone and content based on what will resonate best.
• Build positive relationships: Engage stakeholders early, tailor communication, be transparent, and adapt strategies based on feedback.

4. Create a project communication plan

Tailor communication to each stakeholder group’s needs and preferences, and use it as your guide throughout the project.

• Revisit your matrix and adjust: Revise your stakeholder matrix (if needed) so stakeholders are plotted according to priority — then determine key messages.
• Match objectives: By this stage, you should have a crystal clear view of your goals, the goals of your stakeholders, and their influence. So as part of your communication planning, think about how you can align communication efforts with both your needs, and your stakeholders’ needs. Plan the frequency of communications and align with project milestones.
• Choose channels: Select appropriate communication methods (e.g., email, meetings, limited access to your project management software, and so on. The more flexible you can be, the happier your stakeholders). 
• Create content: Tailor content to be relevant and engaging. Be sure to use diagrams and charts to make complex data easier to process. 
• Add feedback mechanisms: Encourage and act on feedback. Stakeholder needs vary and change over time, so regular check-ins keeps everyone happy. 
• Monitor and adjust: Track the effectiveness of your communications, and adjust strategies over time.

Example communication plan

Stakeholder group	Communication channel	Frequency	Key messages	Feedback mechanism
High influence/interest	Weekly meetings	Weekly	Project progress, key decisions	Post-meeting surveys
High influence/low interest	Monthly reports	Monthly	Major milestones, critical issues	Email feedback
Low influence/high interest	Email updates	Bi-weekly	Updates on project status, minor changes	Feedback form on website
Low influence/low interest	Quarterly newsletters	Quarterly	Overview of project progress, upcoming events	Informal feedback via email

Project management tools were made for stakeholder analysis 

When it comes to stakeholder analysis, project management tools are a must-have. Sure, you can send out email updates, hold regular meetings, and keep track of tasks in a spreadsheet — but why would you when you can use a platform that automates half of it and keeps it in one centrally managed hub? 

From burndown charts to workflows, task tracking, automatic notifications and more, Backlog (our own PM tool) does it all. And one of its most useful features when it comes to stakeholder management? Multiple access options. 

Whether you’re sharing things with the team, or giving external stakeholders a password, simply choose your access level, and invite everyone aboard. When it comes to managing stakeholders, organization and transparency are key. Backlog makes it easy — give it a try for free today.