Revision as of 21:43, 8 May 2023

Developed by Carl Bygum Knudsen

Abstract

The assessment of stakeholders is a crucial element of any project or business strategy. It involves identifying, analyzing, and evaluating the stakeholders’ interests, potential, and influence to determine the best way to manage and interact with them. Stakeholder assessment, in essence, is the categorization and classification of stakeholders in a way that clarifies how each individual stakeholder should be managed.

This wiki article provides a comprehensive overview of the assessment of stakeholders, including a discussion of the key steps involved, some of the tools and techniques used, and the best practices. The article initially explains and discusses the importance of stakeholder assessment in project management.

The critical steps of the assessment process will be discussed followed by the different tools and techniques used to assess stakeholders at each step. The article includes and briefly describes tools that assist the overall process of stakeholder analysis such as brainstorming, various mapping tools, surveys and interviews, and other relevant data collection tools and techniques. The wiki article will touch upon these subjects but focus more on the tools that allow for the assessment of stakeholders such as stakeholder mapping and power-interest grid.

Finally, the wiki article will outline some of the potential challenges and risks associated with stakeholder assessment. These include the potential for conflict of interest, unequal access to resources, and difficulty in managing stakeholders with differing interests. In general, this article provides a comprehensive overview for project managers to understand and implement of the assessment of stakeholders and the key steps, tools, and best practices involved.

Introduction

According to the PMI standard, "the purpose of stakeholder engagement is to enable the needs, interests and concerns of stakeholders to be identified, understood and addressed sufficiently to enable the objectives to be met ". Stakeholder assessment is a part of the larger and more complex task of stakeholder engagement - and later management of those stakeholders. It is the initial process in stakeholder analysis of providing a clear understanding of stakeholders' interests and expectations. While stakeholder management is the overarching concept and the ongoing process of engaging and meeting the expectations of stakeholders, stakeholder assessment is increasingly focused on understanding the way a stakeholder may impact a project. To effectively deliver the outcomes of a project, a project manager needs to be capable of systematically gathering and analysing information about the stakeholder to prioritize the various interests.

Stakeholder analysis is the art of knowing the entities and persons that will or can be impacted by the endeavours that you as a project manager strive to achieve. Getting the stakeholder management, and subsequently, the stakeholder assessment right in the first place is a vital cornerstone in any project. To gain a thorough understanding of stakeholder assessment, it is crucial to explain the steps of stakeholder assessment in detail.

Tags: Stakeholders, stakeholder assessment, stakeholder analysis, stakeholder management, stakeholder prioritisation, Power-Interest Grid, Salience Model, stakeholder mapping, stakeholder power, stakeholder influence, Project Management, Portfolio Management, Program Management

Stakeholder Assessment Process

Each step is outlined to give the reader a context, but the actual stakeholder assessment predominantly takes place in steps 2 & 3, and this article will have a higher focus on the 3rd step and the tools that are relevant for this phase of stakeholder assessment. It is relevant to note, that these steps recur in various other guides on stakeholder management and stakeholder analysis, and literature often uses these definitions interchangeably. In the following section, "Tools & Techniques ", selected tools and techniques are presented to equip the project manager with the necessary knowledge to perform each step of the stakeholder assessment.

Identification: Brainstorm on and document stakeholders

Stakeholder identification is crucial to the success of any project, as it ensures that all individuals or groups affected by the project are identified and their needs and expectations are taken into account. This process is ongoing and requires effort to determine who will be impacted by the project, as well as to manage them throughout the project life cycle. To start the identification process, it is important to review relevant project documents, organizational policies, and guidelines to identify stakeholders who may have regulatory requirements that need to be taken into account. Brainstorming with a diverse group of individuals can be beneficial to identify essential stakeholders who may not have been identified. A comprehensive stakeholder identification plan can be created using techniques such as stakeholder mapping, project charter, and stakeholder register, setting the project up for success.

Analysis: Categorize and analyze interests and potential

After stakeholders have been identified, documented and brainstormed upon, it is crucial to classify and evaluate their interests and potential effects on the project. This entails reviewing how the project's objectives correspond with the expectations and concerns of the stakeholders. By obtaining this information a project manager can more easily comprehend their potential impact on the project and how to engage with them effectively. Use this step to find out what each stakeholder group's particular interests, demands, and expectations are. Surveys, interviews, focus groups, and one-on-one interactions are some tools that can be used to accomplish this. Take into account their goals for the project, their motives, and any potential conflicts of interest. Being able to clearly describe your project and the outcome of the project will improve the quality of this step.

Prioritization: Evaluate stakeholder power and influence

After categorizing and analyzing the stakeholders, it is critical to assess their level of influence and prioritize them according to their importance to the project's success. Some stakeholders may wield more power than others, either because of their position within the organization or because of their level of interest in the project. Understanding the level of influence of stakeholders allows you to develop strategies for engaging with them effectively and managing their expectations.

While doing these exercises, it is a good idea to take into account elements like their power to make decisions, access to resources, knowledge, and degree of support or resistance to the initiative. Determine each stakeholder group's potential contribution to the project's success. This entails evaluating how well they can help or hurt the project, as well as how willing they are to actively participate and collaborate. Think about the ways that stakeholders can help the project achieve its goals, reduce its risks, or offer insightful information.

Monitoring Engagement: Plan, implement and communicate

The final step in the stakeholder assessment process is to develop a plan to engage with the stakeholders, implement the plan, and communicate with them throughout the project lifecycle. This involves developing communication strategies that are tailored to the needs and interests of each stakeholder group, and ensuring that stakeholders are informed of the project's progress and any changes that may impact them.

By engaging with stakeholders throughout the project lifecycle, you can build trust and establish strong relationships that assist in making the project successful. This will ensure stakeholder buy-in and build the foundation for more successful projects. Monitoring stakeholder engagement is a reoccurring step, that will require you, as a project manager, to frequently check up on your stakeholders. Make sure that they are on board and following the project plan, and investigate if there are any challenges on the horizon and how you might remediate those challenges.

Tools and Techniques

Identifying the stakeholder: Stakeholder Mapping

Stakeholder mapping is very useful to project managers since it provides an easy way to understand the various perspectives and needs of stakeholders and to create communication and engagement strategies accordingly. It can also help identify potential risks or opportunities associated with stakeholders and guide decision-making throughout the project. Stakeholder mapping primarily involves the visual representation of the ecosystem or the environment that the project is done in, but secondly, it also hints at what kind of influence, power and interest the mapped stakeholders exercise. While there are several ways of visually representing the stakeholder environment as well as kick-starting the brainstorming session on stakeholders.

A suggested tool for this phase is the Ecosystem Map developed by PROTEUS, a more detailed approach to traditional stakeholder mapping that is a useful tool for organisations to gain a better understanding of the complex relationships that exist in their operating environment. The mechanics is similar to the ones of the Social Network Diagram. https://www.pmi.org/learning/library/planning-effective-stakeholder-management-strategies-development-6058 In short, to develop an Ecosystem Map, the scope and purpose of the map needs to be understood. The project manager needs to set boundaries and determine the level of detail and brainstorm on central stakeholders. These stakeholders a plotted on the map, whilst indicating flows of resources are connected between stakeholders to visualise the interdependency, or lack thereof, between stakeholders.

Analysing the stakeholder: Categorisation

This tool, often referred to as stakeholder analysis or engagement matrix, takes the input gained from qualitative and quantitative methods such as interviews, surveys and other relevant data collection. While there are various ways to collect stakeholder insights, a classical stakeholder analysis matrix is optimal to keep track of the knowledge obtained. The tool can be customised to fit the needs of the project manager depending on the wanted level of detail. It usually involves the name of the stakeholder, area of interest, contribution, expectations and influence. It may also be used a as stakeholder engagement matrix, where the purpose of the tool is to

Power-Interest Grid

The power interest grid is a tool used in stakeholder analysis to map stakeholders based on their level of power and interest in a project or organisation. It helps identify key stakeholders and develop effective communication and engagement strategies. The power-interest grid, also known as the stakeholder prioritization matrix, is a useful tool for analyzing stakeholders in a project or organization. It helps to identify the stakeholders that require the most attention and prioritize the allocation of resources accordingly. The grid works by plotting stakeholders based on their level of power and interest in the project. Here are the three steps for using a power-interest grid:

What is it?

A power-interest grid is a visual tool that helps to identify stakeholders who have a high level of power and interest in the project. It consists of a grid with four quadrants, with stakeholders plotted based on their level of power and interest.

Why use it?

The power-interest grid is an essential tool for stakeholder analysis because it helps project managers to focus their resources on the stakeholders who have the most significant impact on the project's success. It also helps to ensure that the stakeholders who are most interested in the project are kept informed and engaged throughout the process.

How to use it?

To use the power-interest grid, you first need to identify the stakeholders involved in the project and their level of power and interest. Then, plot each stakeholder on the grid according to their level of power and interest. Stakeholders in the ***high-power/high-interest*** quadrant should receive the most attention.

Next is those in the **high-power/low-interest** quadrant, then those in the **low-power/high-interest** quadrant. Finally, stakeholders in the **low-power/low-interest** quadrant should receive the least amount of attention. The power-interest grid can be updated regularly to reflect changes in stakeholder priorities and interests.

The article will provide several tools to lift this task. However, the company example in this article will focus on "high-power / high-interst stakeholders", which have a substantial impact on project decisions and results.

Stakeholder Action Plan

Other tools; Stakeholder Analysis, survey, interviews, brainstorming, data collection

Stakeholder Mapping

Stakeholder mapping is very useful to project managers since it provides an easy way to understand the various perspectives and needs of stakeholders and to create communication and engagement strategies accordingly. It can also help identify potential risks or opportunities associated with stakeholders and guide decision-making throughout the project. Stakeholder mapping primarily involves the visual representation of the ecosystem or the environment that the project is done in, but secondly also the identification of what kind of influence, power and interest the mapped stakeholders exercise. The concept of stakeholder mapping can essentially be both. In the following section, the tools and techniques to do such will be explained.

Best Practices

Examples of stakeholder assessment, tool application and power dynamics

The following section will showcase company examples and how the tools above contributed to stakeholder knowledge. Each company analysis will be explained briefly to highlight the importance and benefits of the tools applied and act as a guideline to future project managers on how to gain stakeholder insights.

In a project conducted in the course 42433 - Advanced Engineering Project, Program and Portfolio Management at DTU in Spring 2023, a group worked with a global food company to increase stakeholder buy-in for a new strategy implementation project. This strategy had been devised in the operational department together with a consultancy company. Due to classified information and signed non-disclosure agreements the following analysis has been anonymised, the company will be referred to as Company A.

Company A

In this example, Company A had already done the initial steps in the stakeholder assessment process, however revisiting the step of prioritizing stakeholders helped them rethink their approach to dealing with this issue. Moreover, it allowed them to have a more streamlined process in future projects. The company initially drew up an organisation diagram (see Figure X) to obtain an overview of relevant entities that could be important to the project. A part of the strategy project requires the Sales Department to input data regularly to obtain better forecasting of their supply and demand. From interviews with Company A, it became clear that the company lacked buy-in from the Sales Department. By mapping the most important stakeholders, in relation to the task of gaining more buy-in on the overall project, it became easier not only to develop engagement strategies for the Sales Department. Company A also gained a more in-depth understanding of the problem.

As shown in Figure X, the Slaughtering Department had little-to-no power and interest over this part of the project, hence classified as not relevant. The Sales Department had low interest in inputting the data, however, they had the primary control and power of the data collection process. Company A's top management department is shown to have high power and high interest in the project, and in any other project, this would have been the main stakeholder to monitor. Nevertheless, in relation to stakeholder buy-in the top management was already fully on-board and highly motivated on the implementation strategy, and from that point of view, these were not the primary entity to work with in relation to increasing stakeholder buy-in.

In that discussion, it is important to note, that the Power-Interest Grid have its limitations, and it is key that the project manager utilizes the strength that the tool provides. In hindsight, it could have been useful to change to approach to the traditional Power-Interest Grid and change the axis to e.g. impact on project and probability to impact (as explained above), which would have made more sense for the ongoing project of supply and demand forecasting as the Sales Department would have gained more attention from the get-go, which might have avoided the issues to arise later on in the project. However, this would also make it more difficult to make an overall tool for stakeholder buy-in future projects. and Based on the analysis it was crucial to increase the interest from the Sales Department and the DTU-course project used the analysis as a starting point to devise the tools and strategy needed to increase engagement for this particular stakeholder.

Challenges and Risks

Stakeholder assessment is an essential process for any organization, as it allows them to identify and prioritize the various stakeholders that are affected by their operations. However, this process can be fraught with challenges and risks, some of which are outlined below.

Conflict of Interest

One of the most significant challenges in stakeholder assessment is dealing with conflicts of interest. Stakeholders may have conflicting interests, which can make it difficult for organizations to determine which stakeholder groups to prioritize. For example, a company may be faced with the competing interests of its shareholders, employees, and customers. In such cases, it is essential to establish a fair and transparent process for stakeholder engagement, where all stakeholders have an opportunity to express their concerns.

Stakeholder assessment involves dealing with diverse interests and opinions, which can be challenging to manage. It is essential to ensure that all stakeholders are engaged in a meaningful and respectful way, and that their concerns are taken seriously. Organizations must be prepared to address the concerns of all stakeholders and find common ground where possible. This can be challenging, especially when stakeholders have vastly different perspectives and priorities.

Unequal Access to Resources

Another significant challenge is the unequal access to resources. Different stakeholders may have different levels of access to information, resources, and decision-making processes. For instance, a company's management team may have access to more resources and decision-making power than its employees. This disparity can create a power imbalance, which can be a barrier to effective stakeholder engagement. It is essential to establish processes that enable all stakeholders to have equal access to information and resources.

Difficulty Managing Diverse Interests

Stakeholder assessment involves dealing with diverse interests and opinions, which can be challenging to manage. It is essential to ensure that all stakeholders are engaged in a meaningful and respectful way, and that their concerns are taken seriously. Organizations must be prepared to address the concerns of all stakeholders and find common ground where possible. This can be challenging, especially when stakeholders have vastly different perspectives and priorities.

REF IDEA: Bendtsen et al 2020: Clear definition of stakeholders and how to determine power and influence?

Conclusion

In conclusion, stakeholder assessment is a critical process that can significantly impact the success of any project or business strategy. Stakeholder engagement encompasses a wide range of factors, and it is crucial to carefully choose the tools and approaches that align with the specific objectives one aims to achieve. It should not be viewed as a strictly linear process, but rather as an iterative one that emphasizes the selection and application of appropriate tools and theories suitable for the situation. Through stakeholder analysis and evaluation, organizations can identify and prioritize stakeholders, understand their needs and interests, and develop strategies for effective engagement and management.

The key steps in the stakeholder assessment process can help any project be better suited at turning the project into a success. The process includes identifying stakeholders, analyzing their interests and potential, evaluating their power and influence and finally maintaining the achieved outcome through continuous stakeholder monitoring and engagement. The use of various tools and techniques such as stakeholder mapping, stakeholder and power-interest grid can help to facilitate the assessment process. Achieving a favourable project outcome involves striking a balance among stakeholders' interests, recognizing their different types, and determining appropriate modes of interaction.

It is also essential to be aware of the potential challenges and risks associated with stakeholder assessment, such as the potential for conflict of interest, unequal access to resources, and difficulty in managing stakeholders with differing interests.

Overall, stakeholder assessment is a crucial process to identify, understand, prioritize and implement, and it can contribute significantly to the success of projects and strategies. Mastering the art of stakeholder assessment allows the project manager to execute the endeavour and thereby obtain the desired outcomes of a project, portfolio or programme.

Bibliography

References (In progress - may be subject to change)

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