Stakeholder Analysis

1. The Importance of Stakeholder Analysis

As you remember from the last lesson, the first step in the process of managing stakeholders during the initiation phase is to identify stakeholders. Remember, the ultimate goal is to identify your stakeholders, analyze their needs, and then eventually create the stakeholder register—which ultimately helps you manage your stakeholders. This will be a living document you use throughout the life of a project.

Let’s look at how we perform stakeholder analysis, now that we have our stakeholders identified. We can use a variety of tools to assess how we might want to manage and communicate with them. Let’s look at some of those tools now.

1a. The Power and Interest Grid

Now that you know who your stakeholders are, you need to determine what power they have and what their intentions toward your project are. Do they have the power to have an impact on your project? Do they support or oppose you? What strategies can you use to manage them?

As you can see, the power-interest grid has two dimensions:

1. Power, which is the level of authority or influence a stakeholder has over the project (e.g., the ability to make decisions, allocate resources, or stop the project)
2. Interest, which is the level of concern or involvement a stakeholder has in the project’s outcome (e.g., how affected they are by its success or failure)

When we look at each quadrant, we can see that there is either low power or high power and low interest or high interest. Based on where a project manager believes these areas are, is how they will ultimately strategize on how to best manage those stakeholders.

EXAMPLE

If a stakeholder has low interest and low power, a project manager doesn’t need to do much except monitor them. However, a stakeholder with high power and high interest will be managed closely through more detailed and frequent communication.

Prioritizing stakeholders in this way is significant for several reasons:

• Resource allocation: Focus efforts on influential stakeholders to use resources efficiently.
• Enhanced communication: Understanding power and interest allows us to tailor communication strategies based on the needs and wants of the stakeholders.
• Improved project quality: Early stakeholder engagement provides valuable input, guiding decisions and aligning goals.
• Increased support and buy-in: Considering stakeholders’ interests boosts support and resource acquisition.

Based on where you identify your stakeholders to be, here is your likely communication strategy:

Quadrant	Description	Strategy
High power, high interest	Stakeholders who can influence the project and are deeply invested in its success	Manage closely: Involve them in decision making, keep them informed, and engage them regularly.
High power, low interest	Stakeholders who can influence the project but aren’t very involved or interested	Keep satisfied: Provide just enough information to keep them supportive without overwhelming them.
Low power, high interest	Stakeholders who care about the project but lack the authority to influence it significantly	Keep informed: Provide updates and involve them as appropriate; they can be valuable supporters.
Low power, low interest	Stakeholders who have minimal influence and limited interest in the project	Monitor (minimal effort): Keep an eye on them in case their position changes, but don’t invest heavily in engagement.

The advantage of using this grid is to help prioritize communication, stakeholder engagement, and support smoother stakeholder management during the execution phase in the project lifecycle.

Once you know the power and interest of each of your stakeholders, you add to the document we started in the last lesson by including the level of interest and influence for each stakeholder. That has been added for our day spa example:

Stakeholder Name/Group	Role	Internal/External	Interest/Influence	Communication Needs
Maria Lopez	Project sponsor	Internal	High: oversees project success and provides funding
James Chen	Project manager	Internal	High: responsible for project execution and timelines
Marketing department	Content and branding support	Internal	Medium: needs consistent branding and timely content delivery
IT contractors	Technical support	External	High: responsible for infrastructure, hosting, and security
Employees/staff	Intranet users	Internal	Medium: affected by usability and internal communications
Customers	End users of a public website	External	High: expect a user-friendly, accessible, and reliable online experience
Visual design agency	Visual design contractor	External	High: delivers visual assets critical to project branding and user experience (UX)
Freelance web developer	Web development	External	High: implements front-end/back-end functionality and ensures technical success
Community members	Local public audience	External	Low: may be indirectly impacted by project reach and visibility

terms to know

Power

In the power-interest grid, the level of authority or influence a stakeholder has over the project (e.g., the ability to make decisions, allocate resources, or stop the project).

Interest

In the power-interest grid, the level of concern or involvement a stakeholder has in the project’s outcome.

Resource Allocation

The process of assigning and managing assets—such as time, money, people, equipment, or materials—to meet project goals or organizational objectives.

1b. The Stakeholder Register

Now that we know the interest and power of each of our stakeholders, we can fill in the next step of our stakeholder register, which is the final step in the initiation phase of the project management lifecycle.

Stakeholders with high power and high interest should be managed closely. These are individuals, like project sponsors or executives, who need to be engaged regularly through detailed updates, frequent meetings, and opportunities for decision-making input. Clear, proactive communication helps keep them supportive and informed. Communication with these individuals should be frequent, detailed, and collaborative. They might include meetings and reports on a frequent basis.

Those with high power but low interest should be kept satisfied. They may not be involved in day-to-day decisions, but their influence means they should receive occasional high-level updates, especially at key milestones, to ensure their support and prevent disengagement or pushback. Communication here should be brief but strategic, giving them just enough to stay aligned with the project’s progress. Communication with these individuals should be occasional, concern high-level/big-picture matters, and be in the form of a status update email.

Stakeholders with low power but high interest, such as end users or team members affected by the project, should be kept informed. These individuals are often deeply invested in the outcome, so regular communication, such as status updates, training sessions, and opportunities to provide feedback, helps maintain their support and morale. While they may not drive decisions, their buy-in is essential for implementation success.

Lastly, stakeholders with low power and low interest should be monitored with minimal effort. These individuals require only occasional updates or passive communication, such as access to general information via newsletters or a project website. It’s still important to track their status in case their level of interest or influence changes.

By categorizing stakeholders in the stakeholder register now, we know how to communicate with them throughout the next phases of the project.

Let’s look at how our stakeholder register might be filled out now, based on the information about communication levels, combined with the information we’ve developed in our power-interest grid:

Stakeholder Name/Group	Role	Internal/External	Interest/Influence	Communication Needs
Maria Lopez	Project sponsor	Internal	High: oversees project success and provides funding	Regular executive updates and milestone progress reports
James Chen	Project manager	Internal	High: responsible for project execution and timelines	Daily or weekly team meetings and status reports
Marketing department	Content and branding support	Internal	Medium: needs consistent branding and timely content delivery	Weekly check-ins and content review cycles
IT contractors	Technical support	External	High: responsible for infrastructure, hosting, and security	Clear technical documentation and scheduled updates
Employees/staff	Intranet users	Internal	Medium: affected by usability and internal communications	Training sessions and feedback surveys
Customers	End users of a public website	External	High: expect a user-friendly, accessible, and reliable online experience	Usability testing and satisfaction surveys
Visual design agency	Visual design contractor	External	High: delivers visual assets critical to project branding and UX	Creative briefs, feedback loops, and revision cycles
Freelance web developer	Web development	External	High: implements front-end/back-end functionality and ensures technical success	Technical specs, sprint reviews, and regular updates
Community members	Local public audience	External	Low: may be indirectly impacted by project reach and visibility	Public announcements and press releases

IN CONTEXT
Agile Connection

In the Waterfall project management method we’ve been discussing and the Agile focus on stakeholders and how to effectively manage them, the main differences exist in “when” communication with stakeholders happens. In the Waterfall method, stakeholders are listed up front (in the stakeholder register), and a communication plan is addressed. With Agile, stakeholders are identified, but they are involved in the entire process of development—and it is more continuous and collaborative rather than focused on informing them along the way.

The stakeholder register, throughout the project lifecycle, will be the guiding document for stakeholder communication. In our next lesson, we will address some of the other considerations when identifying stakeholders.