Four Steps In Managing Stake Holders

The Key to a Successful HR Project: Stakeholder Analysis By Melissa Kantor, PMP

June 2006

Project stakeholders can make or break an implementation of an HR business process, technology solution or business initiative. Communicating with stakeholders early in the project can help clarify project scope and desired outcomes, create advocates who understand the benefits of the project and ensure support throughout the project. Stakeholder analysis is an important tool used to identify the key people (stakeholders) involved with a project. The project manager usually performs this analysis with inputs from project team members and project sponsors. Stakeholder analysis consists of four steps: Step Step Step Step

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Identify stakeholders. Rank stakeholders. Understand stakeholders’ needs and agendas. Understand the relationships between stakeholders.

Step 1: Identify Stakeholders The first step in stakeholder analysis is to identify who the stakeholders are. A stakeholder is anyone who is impacted, either directly or indirectly, by the project or who has an interest in the project. It can be very helpful to have a brainstorming session with the project team and/or project sponsors to list all of the individuals who may be affected by the project. However, determining the final listing of stakeholders is generally best left to the project manager and project sponsor. Examples of stakeholders include project sponsors, project managers, project team members, senior executives, shareholders, regulatory/government agencies, co-workers, the general employee population, suppliers/vendors, IT departments, the public, the community, etc. It is very important to identify individuals as the stakeholders--and not organizations or departments. For example, if a stakeholder for an HR technology implementation is the Web portal group, project manager should engage with this group early to identify an individual who will be the point of contact. Step 2: Rank Stakeholders After identifying all of the stakeholders, the next step is to rank the stakeholders. There are several methods for doing this, but the best method available is the power/interest model. For each stakeholder, the degree of his or her interest in the project must be identified, along with the degree of power or influence over the project and within the organization. It can be helpful to plot this information on a chart (see Figure 1).

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Some stakeholders may have a high interest in the project and be very powerful players within the organization. These are the key stakeholders (i.e., the most important stakeholders), and they need to be kept engaged and satisfied (see the red box in Figure 1). This group needs to be kept happy and should be managed most proactively. Other stakeholders may also have high influence within the organization, but may not be overly interested in the project (see the blue box in Figure 1). These stakeholders need to be kept satisfied. This group can be the most difficult to manage because they may behave passively throughout the project but can exert enormous impact if left unhappy. It is best to engage with these stakeholders early to understand their needs and agendas, ensure their satisfaction and prevent any surprises down the road. Other stakeholders have a high interest in the project but fairly low power within the organization (see the green box in Figure 1). It is best to keep these individuals informed in a timely manner because they may be able to provide valuable and helpful input into the project. Finally, the last group of stakeholders has a fairly low interest in the project and low influence within the organization (see the black box in Figure 1). It is best to inform these individuals as necessary and avoid excessive communications. That said, it is wise to monitor this group in case any of the stakeholders increase their degree of influence or interest. Step 3: Understand Stakeholders’ Needs and Agendas After identifying and ranking all of the stakeholders, the next step is to better understand the needs and agendas of each stakeholder, focusing on the key stakeholders. This will help identify those stakeholders who could be advocates, blockers, supporters, etc. The best method of identifying and understanding the needs and agendas of stakeholders is by interviewing each stakeholder on a one-on-one basis.

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This can be time-intensive, but when done early in the project, it can help save time later on by ensuring all stakeholders’ needs are adequately addressed. Some questions that may help identify and understand stakeholders’ needs and agendas include: • • • • • • • • • • • • • • • •

Does the stakeholder have a financial, emotional, political or career interest in the success (or lack thereof) of the project? What motivates the stakeholder within the organization and with respect to this particular project? What information do you want from the stakeholder? What assistance do you want from the stakeholder? What expectations do you have of the stakeholder? What is your opinion of the stakeholder? What information does the stakeholder want from the project? What assistance does the stakeholder want from the project? What expectations does the stakeholder have of the project and its outcomes? What opinion does the stakeholder have of the project and the individuals involved? Who influences this stakeholder and to what extent? Who does this stakeholder influence and to what extent? Is this stakeholder likely to be positive or negative with respect to the project? If the stakeholder is positive, what can be done to ensure he or she remains positive? If the stakeholder is negative, what can be done to change his or her mind? If the stakeholder is negative and his or her mind cannot be changed, how will this be managed in order to minimise negative impacts to the project?

Step 4: Understand Stakeholder Relationships After identifying and ranking all of the stakeholders and understanding their individual needs and agendas, the next and final step in stakeholder analysis is to better understand how the stakeholders relate to each other. This will help manage stakeholder expectations, ensure positive stakeholders remain positive, minimize the effects of negative stakeholders and help persuasion/communication efforts. Some • • • • • • • • • •

questions that may help identify the relationships between stakeholders include: Who influences this stakeholder and to what extent? Who does this stakeholder influence and to what extent? Who does this stakeholder report to? Who reports to this stakeholder? Who did this stakeholder used to work with/report to? What other projects was this stakeholder involved with? What other committees/steering groups was this stakeholder a part of? Is this stakeholder involved in any professional organizations? Is this stakeholder involved in any supplier/vendor/customer management? Is this stakeholder involved in any regulatory/government agency management?

Stakeholder relationships are often very complex. Understanding the nuances of stakeholders’ needs and agendas and how they relate to each other often requires delicate and sophisticated relationship management and consulting skills, especially when dealing with senior management or representatives from external agencies. It is

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very important to understand that the relationships between stakeholders can be positive or negative. It is also important to note that the needs and agendas of stakeholders can be competitive, mutually exclusive or synergistic. A helpful technique to better and more clearly understand the relationships between stakeholders is to plot each stakeholder on the Power vs. Interest Chart and then draw lines between the stakeholders that have close ties (see Figure 2). In this example, Sue is a key stakeholder with high power and high interest. Bob, who has low interest in the project, has high power within the organization. We see that Emma, who has high interest in the project but low power with the organization, has a relationship with Bob. If Emma is kept well informed, she could help the project team manage Bob’s needs and agendas by providing insight into his motivations and help ensure this high-power individual does not cause a negative surprise down the road.

Taking this a step further, it can be extremely helpful for the project manager to place him/herself on this chart. More often than not, project managers have high interest but not necessarily high power. Understanding where the project manager fits in and understanding the relationships the project manager has will help the project manager better understand how to leverage those relationships and ‘drive’ the project through to a successful completion (see Figure 3).

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Sue

In this example, Sue is a key stakeholder with high power and high interest. Ty, who has high interest in the project but low power within the organization, has a relationship with Sue. We also see that the project manager, Mel, has a relationship with Ty but not with Sue. Mel could leverage her relationship with Ty in several ways: (1) to better understand Sue’s needs, agendas and motivations; (2) to help build Mel’s own relationship with Sue; and (3) to better manage and communicate with Sue. In more sophisticated charts, different lines can be used to represent different types of relationships. For example, white lines can represent positive relationships and red lines can represent negative relationships. Plotting all of the stakeholders (including the project manager) and drawing all of the relationship lines result in a very powerful visual aid. This visual representation will help the project manager better understand and navigate the stakeholder environment. Conclusion Stakeholder analysis is a powerful tool that can help ensure the success of HR projects by clearly identifying and understanding the needs and expectations of key influencers and decision-makers within the organization. This analysis has four steps: identifying stakeholders, ranking stakeholders, understanding stakeholders’ needs and agendas, and finally understanding the relationships between stakeholders. Once this analysis is complete, a proactive communication and stakeholder management plan can be developed and implemented. SHRM wishes to thank Melissa Kantor, PMP for contributing this article. Melissa Kantor, PMP, managing director of Kantor Business Solutions Ltd., has spent the last six years specializing in HR technology project and program management. She has successfully managed many full life-cycle enterprise-wide projects and programs for the world’s leading companies and has a proven track record of success in bringing value to business through project management and engagement leadership. Ms. Kantor is based in London, UK, and can be reached at [email protected].

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This white paper is intended as information only and is not a substitute for legal or other professional advice. The interpretations, conclusions and recommendations in this paper are those of the author and do not necessarily represent those of SHRM. All content is for informational use only and is not to be construed as a guaranteed outcome. SHRM can not accept any responsibility for any errors or omissions or any liability resulting from the use or misuse of any such information.

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