Q 342. One of the key tools during various stage of a project is "Stakeholder Analysis". What are some of the complexities observed in using this tool and how can they be overcome.

 

 

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Q 342. One of the key tools during various stage of a project is "Stakeholder Analysis". What are some of the complexities observed in using this tool and how can they be overcome.

How much ever one wishes that the Stakeholders look at data in unity and take ONE decision, as humans we always will have the Stakeholder POWER / Interest coming into play : as an Advantage or Disadvantage !!

The ideal being : High Power/High Interest, which might as such bring more than what one asks for(Shhhhh, or deserves). From my experience i recall witnessing : Low POWER/High interest giving few of the best learning experiences to the participants of the project.

Coming to the Complexities, the aspects/subsets of the Goal can at times create a complex mix of agreements/disagreements and muddle up enough to hurt the visibility of the benefits of the completion of project. This threatens the progress of the project and the timely completion(along with likely unnoticed quality issues). With an experienced Project Manager at the helm, adequate(or more than adequate) viewpoints/insight perspectives are built into every stage of the project so as to make sure the team never looses direction/clarity/focus even when facing the most challenging realities/perceived realities(most of times not being true).

 

Analysis of stakeholders is an extremely useful technique to define, consider and prioritise all stakeholders that can exercise control or authority over an organisation or project. Analyzing stakeholders, among other things, will demonstrate who they are, what their desires and aspirations might be, and what problems matter to them (and to what degree). This exercise will tell you, just as importantly, their true level of interest and/or control over your project.

 

A detailed review would ensure that due consideration is extended to all involved parties. The effects of dispute resolution can be significantly enhanced with access to this information. It can also make the regular stakeholder involvement activities even more targeted.

 

Not every stakeholder is made equal. Nor are any of them worth the same amount of publicity.

 

This is why it is so advantageous to perform stakeholder research. It helps you to clearly recognise and categorize all stakeholders in order of priority as it relates to your attempts to secure social recognition and ensure the successful delivery of projects.

 

More importantly, this study would tell you the priorities of all stakeholders, the characteristics of project proponents and opponents, as well as the interrelationships and interfaces that exist between them that will impact or be influenced by the project.

 

In a variety of ways, stakeholders can be identified:

 

I. Brainstorming for teams: The idea here is to come up with the longest possible list of potential.  It will not keep all recommendations, but reserve judgement for the end. Better to root it out than to neglect it.

II. Experience of team members: Over time, chances are your team has built up valuable information, so be sure to tap into it.

III. Historical data: piles of data from past initiatives may have been collected by your company. It actually makes sense to use this data to inform your stakeholder research, as it encourages productivity and builds on experience.

IV. Comparable: You will often be working in a new location or on a particular project type. Look for similar projects wherever possible and find stakeholders that might have been involved. Chances are that the same kinds of stakeholders would influence the current project (or be affected by it).

 

The more methods that you use, the less likely you are to neglect key stakeholders.

 

There are a variety of different models that can be used to identify stakeholders based on their control over the results of a project or involvement in them. Some models take into consideration other requirements, such as the urgency and credibility of the stakeholder.

 

The essence of your project, the resources available, and the timeline may determine which model is most suitable.

Following Methods help you categorize stakeholders:

 

1. Power-Interest Matrix: This matrix shows how strong stakeholders are on one axis, and how much these stakeholders influence or are influenced by the company on the other.

I.   Key Stakeholders: Key stakeholders are those who have the greatest impact, the greatest strength, or who are commonly considered to be the most important to your project's success. Such stakeholders need to be closely managed because they not only have a vested interest in the project's outcome, but also have the ability to seriously undermine or strengthen its delivery. In the power-interest matrix above, main stakeholders are easily defined. Typically, they live in the quadrant of high power and high interest. It is also worth keeping close tabs on low-powered, highly involved stakeholders, as these stakeholders may ally with high-power, low-interest groups, thereby becoming key stakeholders.

II.   Primary Stakeholders: As they are the most impacted by your project, primary stakeholders are usually the easiest to find. Examples may include people who will have to be moved, who will be employed by the project, or who will benefit directly from new infrastructure growth.

III.  Secondary Stakeholders: Usually, secondary stakeholders are more difficult to classify because they are more indirectly influenced. Their motives may be more mysterious as well. Customers of the organisation, minority shareholders or members of a pressure group can be examples.

 

 

2. Salient Model: This model allows you to categorize stakeholders according to eight groups, typically visually displayed as a Venn diagram. In accordance with the salience model, as seen in the Venn diagram above, all stakeholders will fall within one of three overlapping circles. The ones that fall inside the overlapping parts (in the diagram above, 4, 5, 6, and 7) merit the most consideration. Non-stakeholders are represented by Section 8, which lies beyond the three circles.

I.    Power: This is basically the same as that mentioned above in the power-interest matrix (high power, low interest; high power, high interest; low power, high interest; and low power, low interest).

II.   Legitimacy: How acceptable is the participation of the stakeholder in the project?

III.  Urgency: How quickly can the needs of the stakeholder be addressed?

 

 

3. Stakeholder attitude and knowledge map: This can be achieved in a variety of ways, such as with a 4-quadrant matrix labelled as follows:

I.  Quadrant 1: Stakeholders who are aware of, and support, your project. There are stakeholders of your "champion". Usually, they do not need much care, but they should not be taken for granted.

II. Quadrant 2: Stakeholders who are aware of, but opposed to, the initiative. Such stakeholders may never be supportive and contingency steps may be appropriate for your project to handle the risks that these negative stakeholders may pose.

III. Quadrant 3: Stakeholders who, while they are generally unaware of what it entails, oppose your project. These stakeholders should be a key focus because, with the relevant details, their attitude can also be changed.

IV. Quadrant 4: Stakeholders who support your venture but are largely unaware of what it means. There is a need to cultivate these stakeholders so they are not lost.

 

 

Generally, stakeholders fell below 5 levels of support:

 

a) Unaware: Certain stakeholders are ignorant of the project and its possible effects on them.

b) Resistant: Certain stakeholders are conscious of but opposed to the project.

c) Neutral: Neither for nor against the project are these stakeholders.

d) Supportive: Certain stakeholders are in favour of and want to succeed in the project.

e) Leading: These stakeholders are actively interested in assuring the progress of the project.

 

 

Questions that will assist you in understanding stakeholders include:

 

I. What economic or emotional interest do they have in your job's outcome? Is it negative or positive?

II. Most of all, what motivates them?

III. What data do they want from you and what is the best way to communicate with them?

IV. What is their impression of your job at present? Is it based on knowledge that's good?

V. Who generally influences their views, and who influences their opinion of you? In their own right, do any of these influencers then become significant stakeholders?

VI. What would win them over to help your project if they aren't likely to be positive?

VII. If you don't think you're going to be able to win them out, how are you going to handle their opposition?

Who else could be impacted by their views? In their own right, do these individuals become stakeholders?

The PowerX Interest stakeholder analysis tool is extremely powerful tool for stakeholder management. Each quadrant of stakeholder pool requires addressing the stakeholder differently but if you have a well defined pool of people lying strictly within each quadrant, then each of these pools can be managed easily for e.g. pool of people in high power and interest are extremely important and need to be informed and buy-ins sought from them from time to time. Those in low Power and Interest quadrant, one may choose to just keep them informed as some of them may transition into another quadrant as the project/ task evolves.

A major issue is correct assessment of interest and Power for each stakeholder. "Interest" can be interpreted for stakeholders differently around a broader and more specific level of detail is relation to the topic in consideration and hence extremely subjective. This may change over a period of time depending upon organizational changes and other external factors. 

 

The other issue, as with many other such 2x2 matrices, is how do you deal with stakeholders that lie close to intersection of all quadrants? You will also typically find many people in that region, which means stakeholder management remains a challenge and difficult to compartmentalize stakeholders in the true sense.

 

Stakeholder analysis:- As synergy is the key to the success of any project, it is imperative to involve all the stake holders in the project appropriately. Stake holder analysis is one such powerful activity which will clearly explain the role and importance of each stakeholder.

 

In stakeholder analysis, project leaders will rank all the stakeholders based on their importance at each stage, and also use appropriate strategies (ex:-written communication, inviting for tollgate meetings, educating about the project etc) to actively involve them in the project.

 

Stakeholder analysis will be done by performing below steps

• Identify your stakeholders
• Group your stakeholders
• Prioritize your stakeholders (rank stakeholders by using power/interest grid)
• Next step is to understand stakeholders to ensure an appropriate strategy is applied to mitigate the risk of stakeholders resistance on project progress.

 

 

Complexities/challenges in using stakeholder analysis:- There are always some practical challenges in implementing any strategy and stakeholder analysis is not exempted to the same. Below are some of the challenges that are commonly encountered while performing stakeholder analysis.

 

• Grouping stakeholders:- This is one task which often misleads the project leaders while performing stakeholder analysis as every individual is different in their approach. often a stakeholder with low importance will react extremely positive and his/her involvement is so high that will confuse the leader, in contrast, there are some stakeholders who maintain low profile toward project though they are in decision making position. 

 

• Communication methods:-  This is another challenge that will impact the stakeholder analysis as many stakeholders perception ability and the tangent of viewing the message will change the overall essence of the content of the communication itself.  Hence by just sharing reports and sending emails to share holders will not activate stakeholders.

 

• Understanding stakeholder needs:-  Understanding stakeholder needs has to be performed with at most care, otherwise the same will send wrong signals to stakeholders about the project benefits. Ex:- if the price reduction plan is communicated with customer (one of the important stakeholders), then it will give positive impact however if the same is emphasized with investors, then they will have negative impression on the project.

 

• Stakeholders inter connectivity has to be assessed:- There is always an interactive effect of different stakeholders that will impact the project. it is not just the project team has connectivity with each stakeholder, there are many internal connections between stakeholders that will have an impact on project. Ex:- man power reduction project will not only have an impact on employees however it has an impact on regulatory authorities who has to protect labor rights.

Below are the points to be considered to overcome the challenges and to execute the stakeholder analysis effectively:-

 

• Grouping stakeholders correctly by analyzing their roles in project will help in getting the power/influence grid correct.
• Allocate project resources appropriately to engage with different stakeholders so that communication is effective
• Interaction effect of different stakeholders to be considered and should be addressed time by time
• Need to probe effectively to understand each stakeholders needs so that the best benefit can be mapped to their needs.

 

 

 

It is very common to see from managers invited for a (project) meeting, a request for the agenda and the participants and their role in the meet. The request is generally from a manager who understands the value of the impact of stakeholder’s influence on the project timelines and outputs. The importance of Stakeholder analysis and effective action on it, lies in the aspiration to uncover and remove any barriers in every milestone /phase of a project- It eliminates the roadblocks in completion of the project by helping to get information about project supporters, opponents , approvers and the level of importance /power of the said type of stakeholders.

Stakeholder Analysis is a step by step process in which you ;

1)      Identify the stakeholder

2)      Understand the needs and requirements of the stakeholders- Understand the priority of each stakeholder and why any one of them would abort/ delay/block the project

3)      Understand the Power and influence- use the Power influence grid <Diagram 1>

4)      Rank them with Power and influence – So that you can prioritize the engagement with the stakeholders whose energies(Power/Influence) spent are focussed appropriately to get maximum benefit to the project plan.

5)      Develop an action plan for the stakeholders– A Sort of TO DO List, with the action, target date and the name responsible stakeholder for each To Do.

Accommodate the following to ensure that the project gives desired results within defined timelines and budgets;

-          Communication strategy within the stakeholders

-          Engagement strategy, so that all are involved and focused on the same goal

-          Risk Capture and Management -  ensure that al failure or risk modes are considered and the stakeholders are educated about the same and the back up plans

-          Success Planning- back up in case of any back out by any stakeholder.

The above mentioned seems an easy process only if the following complexities do not arise;

The common complexities in Stakeholder Analysis and how they can be overcome

#	Complexities of Stakeholder Analysis	How to Overcome
1	identifying the stakeholder is not easy as sometimes some "loud" individuals with minimal knowledge/Control/Power or influence ,may dominate the initial brainstorming process and mislead the identification process	The Project head must map out the stakeholdesr and facilitate the meeting authoritatively to ensure that everyone is allocated equal voice, and the maximum qualitative input is received and recorded.
2	Misjudge the needs of the stakeholders. Example: A project that justifies the process of freezing gravies and replaces the daily gravy making process , in a restaurant chain,thereby reducing labor(requirement of the project) may be opposed by the Trade union and their need could be to fail the project.	- Review project elements that can be opposed/supported and map them <Diagram 2> - Analyse the insights that the matrix and manage accordingly
3	The communication flow goes for a toss	- Ensure each communication(presentation/Brief/Meet/Mail /Instruction note) has a distinct documented purpose and all are educated - Select Apt Communication method for each Stakeholder( individual/Group). For example a PPT Presentation may not go well with employess who may not be educated enough. - Ensure all communication barriers/filters are avoided - Always ensure that the communication cycle is completed. - Consider how teh communication is always 2 way between the project and the stakeholders.
4	The power /Influence of the stakeholder is misjudged	Should not be a "One time" judgement. Must be reviewed and revaluated or reassessed periodically  and amendments should be made
5	Stake holders are grouped incorrectly- Influence and ability to contribute may change over a period of time, in any organisation, moreso in small organisations wherein the hierarchy and  talent acquisition methods can be faulty and volatile.	Should not be a "One time" judgement. Must be reviewed and revaluated or reassessed periodically  and amendments should be made
6	Stakeholders are not aware of or misunderstand the rewards of the project (What is there in it for me)- Leads to dissatisfaction and an human tendency to defeat the project flow may sink in.	- Ensure Clarity in rewards and recognition - Ensure Timely gratification - keep reminding the stakeholders of the status of the project and how close they are to the benefits that the project will provide to them.
7	Risk Associated with the stakeholders are not recognised (Delay in approval, Withdrawing of funds, "Change of mind" due to influence of other stakeholder etc.)	- Keep all possibilities in mind and either keep a backup in mind or manage the stakeholders with any scope of bearing any risk. "Keep eyes an ears open" - keep reminding the stakeholders of the status of the project and how close they are to the benefits that the project will provide to them.
8	Sudden resignation or separation of an active stakeholder	‘- Prepare a comprehensive success plan before or during the project execution

 

It is obvious that most of the complexities are centric around human relationships and the idea to map them and presume or predict reactions at the start and believe that they will remain constant. It is most recommended that the project leader should realise that the stakeholder analysis is not a one off exercise and should go on throughout the project- till completed!!

 

<Diagram 1>

<Diagram2>

If this was a Group Discussion round and I had to shortlist candidates, I would have selected all

All the answers are so well written that it was a tough one to decide the best answer. Kiran and Rajesh Patwardhan have given the most practical answer. Subodh has mentioned three excellent methods of doing stakeholder analysis. Jayanth has highlighted the challenges and their counter measures. However, going by the question - What are some of the complexities observed in using this tool and how can they be overcome - and the number of challenged highlighted, the winning answer has been provided by Rajesh Chakrabarty.

 

Strongly recommended to review all answers for a holistic approach to Stakeholder Analysis.