Stakeholder Analysis

Influence

Influence is defined as the extent to which a stakeholder is able to act on project operations and therefore affect project outcomes.  Influence is a measure of the power of the stakeholder.  Factors likely to lead to higher influence include the extent of control over the project funding and the extent to which the stakeholder informs decision-making around investments in technology and workplace productivity.  A simple scoring system should be used of lower influence (1) or higher influence (2).

 

Importance

Importance is defined as the extent to which a stakeholder’s problems, needs and interests are affected by project operations or desired.outcomes.  If ‘important’ stakeholders are not assisted effectively then the project cannot be deemed a ‘success’.  Again, a simple scoring system should be used of lower importance (1) or higher importance (2). 

The Power Grid (example for a typical Portal Project)

 

The overall ‘Power Score’ is simply a product of the importance and influence scores.  The following 2×2 matrix summarises – for ABC Co – the respective power positions of the stakeholders for the intranet portal project:

 

Higher Importance, Lower Influence (score: 2)  Communications DirectorProcurement DirectorMarketing DirectorIndividual Employees	Higher Importance, Higher Influence (score: 4)  Chief ExecutiveHR DirectorFinance Director
Lower Importance, Lower Influence (score: 1)  Company SecretaryExternal Suppliers	Lower Importance, Higher Influence (score: 2)  IT Director,Line ManagersExecutive PAs

 As one may observe, the importance and influence of certain individuals implies that they will be “key stakeholders” for the project as a whole.  Without their explicit support, it is unlikely that the project could be concluded successfully. 

Stakeholder Approach

 The position of the stakeholder on the Power Grid tends to determine their initial and ongoing role in the project.  At least one (and preferably more) of your score 4 stakeholders should really sponsor your business case and sit on the project steering group.  As such, they are “key sponsors”.  Many of those with a score of 2 will be “secondary stakeholders”. Having determined their relative positions, the next key step is to plan out how you are going to manage each stakeholder during the project.  There are four general techniques at your disposal: 

Partner

Key stakeholders (with high influence and importance to project success) are likely to provide the basis of the project ‘coalition of support’, and are potential partners in planning and implementation. In the example, this coalition of support includes both the HR and Finance Directors. 

Conversely, key stakeholders with lower influence or importance to project success may be ‘managed’; by being consulted or informed:

 

Consult

The opinions and input of the stakeholder will be actively sought for certain key decisions (and not only those which may affect them directly).  Generally, this approach will be appropriate for sponsors with higher influence but lower importance (e.g. the Line Management community in our worked example).

 

Inform

The stakeholder will be informed of decisions taken (generally only those which may affect them directly), but it is unlikely that they would play an active role in making those decisions.  However, were they to highlight a particular issue with a decision, it is likely serious consideration would be given to refining the decision made.  Generally, this approach will be appropriate for sponsors with lower influence but higher importance (e.g. the Communications Director in our worked example).

 

Finally, there may well be some stakeholders (generally those with low influence and importance) where the best approach is to ‘control’ their input – to ensure that project resources are not diverted unnecessarily onto keeping them engaged in inputs, decisions and outputs:

 

Control

The stakeholder will be instructed to observe decisions taken.  Objections to or issues raised with a decision are unlikely to be given serious consideration.  Such stakeholders are likely to be (to some extent) quite literally under the control of the organisation (e.g. external suppliers, in our worked example). 

Stakeholder Participation Matrix

 

Clearly, the respective position of individuals on the Power Grid is unlikely to change significantly over time (during the project) but the approach taken to each may need to vary during the different stages of the project lifecycle.

 For example, it is unlikely that you would be giving your CEO daily updates on the progress of the project, but very likely you would need her specific approval and guidance at project initiation! Thus, the stakeholder approach outlined above needs to be adjusted to take into account the needs of both the stakeholder and the project itself during the project lifecycle. The table below illustrates how the stakeholder participation approach for ABC Co (our worked example) might vary over the life of the project:

Type of Participation

Stage in Cycle	Inform	Consult	Partnership	Control
Initiation		IT DirectorComms Director	Chief ExecutiveHR DirectorFinance Director
Planning	Comms Director	Chief ExecutiveLine ManagersIndividual Employees	HR DirectorFinance DirectorProcurement Director
Implementation	Chief Executive Individual Employees	Finance DirectorProcurement Director Line Managers	HR Director Comms Director	External Suppliers
Monitoring	Chief Executive Line ManagersIndividual EmployeesProcurement Director	Finance DirectorComms Director	HR Director	External Suppliers

 Note the interesting position of the Comms Director, who is consulted during project initiation, only informed through the planning stage but then actively engaged as a partner during implementation.