What is stakeholder analysis and why is it important?

What is stakeholder analysis?

Stakeholder analysis is a systematic process used to identify stakeholders involved or affected by a project, assess their interests and influence, and prioritize them for effective engagement planning. This process helps organizations proactively understand stakeholder perspectives to manage relationships, improving project outcomes and collaboration.

Key objectives of stakeholder analysis include:

• Recognizing all relevant stakeholders, from individuals to groups or organizations.
• Evaluating each stakeholder's power level (influence) and interest concerning the project.
• Informing tailored engagement strategies to address stakeholder concerns and expectations.

What are the five main steps of stakeholder analysis?

Conducting effective stakeholder analysis involves five essential steps:

1. Identify your stakeholders: Brainstorm all individuals, groups, or organizations impacted by or interested in your project.
2. Prioritize stakeholders: Assess and categorize stakeholders based on their influence and interest using tools like Mendelow's Power-Interest Matrix.
3. Understand stakeholder perspectives: Learn their views, concerns, and expectations regarding your project or organization.
4. Engage stakeholders appropriately: Tailor your communication and involvement strategies guided by the International Association for Public Participation (IAP2) Spectrum of Public Participation.
5. Review and update regularly: Stakeholder interests and influence can change; repeat the analysis periodically throughout your project lifecycle.

Why is stakeholder analysis important?

1. Gain a deeper understanding of your stakeholders to drive better decisions and outcomes.
2. Identify issues early by recognizing stakeholder concerns before they escalate into conflicts, reducing risks. In this blog, Dayna Morgan from BRITT RADIUS explained, "Dealing with issues early on can build advocates."
3. Improve communication effectiveness by crafting engagement and messaging strategies suited to stakeholder needs and priorities.

What are the best practices for conducting stakeholder analysis?

1. Identify your stakeholders

Make this a team exercise. Brainstorm a comprehensive list of anyone impacted by or interested in your project.

What are some questions to help identify your stakeholders?

• How could this project impact neighbourhoods or communities?
• Is it on or near traditional Indigenous or Tribal lands?
• Will other organizations be affected?
• What are the environmental or financial impacts?
• Who might be inconvenienced or voice concerns?
• Have you engaged with these stakeholders before?

Answering these helps you build an inclusive list.

Need some help? Here's a list of questions to help you identify your stakeholders →

2. Prioritize your stakeholders

Use Mendelow's Power-Interest Matrix to categorize stakeholders by their influence and interest. This stakeholder mapping technique guides your level of engagement and resource allocation.

Read our blog on stakeholder mapping with a free template →

3. Understand your stakeholders

Once your stakeholders are identified and prioritized, you need to take some time to understand them and their perspectives.

Ask these questions to help understand your stakeholders:

• What does success look like from their perspective?
• How are they positively or negatively affected?
• What is their current opinion on the project?
• What motivates their interest (financial, environmental, emotional)?

Remember, stakeholder positions can evolve from support to objection or vice versa. Monitor regularly.

4. Engage with your stakeholders

The Spectrum of Public Participation, developed by the International Association for Public Participation (IAP2), is an excellent tool for identifying which level of engagement (or participation) is best for your stakeholder engagement strategy.

The IAP2 Spectrum identifies five different levels of participation: inform, consult, involve, collaborate, and empower. Some organizations prefer to choose one strategy for all stakeholders. In contrast, other organizations prefer to tailor their engagement strategy based on a stakeholder's interest or influence/power, enabling them to focus efforts where needed most.

For example, a low-influence/low-interest stakeholder is unlikely to be influenced or concerned about your project and might only need to be informed (often with one-way communication). Your key stakeholders (i.e., high influence/high interest) have a much greater potential to impact your project and, based on the IAP2 levels of engagement, may need to be consulted, involved, collaborated with, and/or empowered, depending on the circumstance or your organization's vision for engagement.

To decide how to engage with your stakeholders, apply the IAP2 Spectrum of Public Participation to determine how to engage:

• Inform: Share information with low-influence/low-interest groups.
• Consult: Seek feedback from moderate-influence stakeholders.
• Involve, Collaborate, Empower: Work closely with high-interest/high-influence stakeholders who can affect the project.

Customize your engagement and communication tactics based on the stakeholders' category for greater effectiveness.

For tips on inclusive stakeholder engagement, check out our blog →

5. Repeat the stakeholder analysis process

Stakeholder analysis is ongoing. As new information and perspectives emerge throughout the project, revise your stakeholder map and engagement plan.

What should I do after analyzing my stakeholders?

Keep detailed records of your communications, issues raised, commitments, and tasks. Use Stakeholder Relationship Management (SRM) software like Jambo to stay organized and track progress in engagement.

Want to know how SRM differs from CRM? Read our blog →

Free stakeholder analysis matrix template

Organizing stakeholder information can be overwhelming. Start with a simple stakeholder analysis matrix to structure data on interest, influence, and engagement priority.

Click the image below to download the free template!

What is effective stakeholder analysis?

• Identifying all potentially impacted stakeholders
• Prioritizing them by interest and influence
• Understanding their perspectives and concerns
• Engaging using tailored approaches
• Regularly updating your analysis

These best practices set the foundation for successful stakeholder engagement and project outcomes.