What is stakeholder analysis? Template, examples, frameworks

There is an African proverb that says, “If you want to go fast, go alone. If you want to go far, go together.” It really struck me when I first heard it and I think it particularly resonates with building products.

For one, you can’t do anything alone! There is no product without a developer writing code, for example. And how do they know what to code without a problem definition and designs that bring it to life?

So, how do you work out who is going to help you go far together? This is where stakeholder analysis comes in. It helps you understand who you want to collaborating with throughout the product lifecycle and how best to communicate with each stakeholder group.

What is stakeholder analysis?

Stakeholder analysis refers to endeavors to identify, understand, and prioritize the various parties involved in a project.

In a nutshell, stakeholder analysis is a systematic process of mapping out the key individuals, groups, or organizations who have a vested interest in a product, assessing their needs and expectations, and determining the best strategies for managing relationships and communication with them.

In product management, stakeholder analysis and management is critical as the landscape is often fast-paced, highly competitive, and involves diverse interests. Engaging with stakeholders in a thoughtful way enables you to gain valuable insights and feedback to shape your product, build a strong ecosystem around it, and, ultimately, deliver a successful, high-impact product that meets the needs of all parties involved.

How to conduct a stakeholder analysis (5 steps)

Obviously, as product managers, you are obsessing over your customers and will understand their needs well. However, there may be other stakeholders beyond your customers who need to be factored into the product design too.

The number and range of people involved with your product will vary depending on your organization’s unique goals and requirements, but the general steps involved in conducting a stakeholder analysis are as follows:

1. Identify stakeholders — List all potential stakeholders, including customers, employees, investors, partners, regulators, and more. Consider everyone who has an interest in the product
2. Prioritize stakeholder needs and expectations — Assess the impact of each stakeholder on the product, as well as their level of influence over its success. Consider factors such as their potential contribution, their ability to affect the outcome, and their importance in achieving project goals
3. Analyze stakeholder relationships — Understand the relationships between different stakeholders and identify any potential conflicts or synergies. This can help in developing strategies to manage their expectations and foster collaboration
4. Develop communication and engagement strategies — Based on the priorities and relationships identified, create tailored communication and engagement plans for each stakeholder group. This includes determining the most appropriate channels, frequency, and type of interaction
5. Monitor and adjust — Regularly review and update the stakeholder analysis, as relationships, priorities, and project requirements may change over time. Adapt communication and engagement strategies accordingly to maintain strong relationships

Managing stakeholder relationships post-analysis

Once you have conducted a comprehensive stakeholder analysis, it’s important to keep the momentum going and continue to manage stakeholder relationships effectively throughout the product development process.

Here are some additional steps to follow after you’ve conducted your stakeholder analysis:

6. Document stakeholder information — Maintain a detailed record of stakeholder information, including their roles, responsibilities, and contact details. This documentation will be helpful in keeping track of communications and ensuring that all relevant parties are informed and engaged
7. Establish clear communication channels — Ensure that all stakeholders are aware of the communication channels being used and the expected response times. This will help in streamlining communication and reducing potential misunderstandings or delays
8. Involve stakeholders in decision-making — Engage stakeholders in the decision-making process, especially when their input or expertise is crucial. This not only strengthens relationships but also improves the overall quality of the product by incorporating diverse perspectives
9. Measure and evaluate stakeholder satisfaction — Regularly assess stakeholder satisfaction to identify areas for improvement and address any concerns. This can be done through surveys, interviews, or informal feedback sessions
10. Recognize and celebrate success — Acknowledge the contributions of stakeholders and celebrate the successful completion of milestones or project phases. This fosters a positive atmosphere and encourages stakeholders to continue supporting the product

By diligently following these steps and continually managing stakeholder relationships, product managers can ensure that they are working effectively with all stakeholders, ultimately leading to the successful development and launch of the product.

Stakeholder analysis frameworks

There are several popular stakeholder analysis frameworks. Some are far more involved than others.

However, the more you are in tune with the environment that you operate in, the quicker this type of exercise can be. Though, like writing, bringing structure to that knowledge and getting it out of your head may uncover some connections you did not see before.

The three most commonly used stakeholder management frameworks are:

• Salience model
• Stakeholder Circle
• Power-interest matrix

Salience model

The salience model for stakeholder analysis assesses stakeholders based on their level of power, legitimacy, and urgency.

From this, stakeholders are categorized into seven groups:

1. Dormant stakeholders — Stakeholders who have power but don’t use it because their interests aren’t affected
2. Discretionary stakeholders — Stakeholders who have some power
3. Demanding stakeholders — Stakeholders who have an urgent claim but lack power and legitimacy
4. Dominant stakeholders — Stakeholders who have both power and legitimacy but their interests aren’t urgent
5. Dangerous stakeholders — Stakeholders who have power and an urgent claim but lack legitimacy
6. Dependent stakeholders — Stakeholders who have a legitimate and urgent claim but lack power
7. Definitive stakeholders — Stakeholders who have power, legitimacy, and urgency

Once you’ve categorized your stakeholders as described above, you can decide how to approach communicating and collaborating with each group.

Stakeholder Circle

The Stakeholder Circle methodology focuses on understanding stakeholder relationships and the impact stakeholders have on each other:

There are five steps to this methodology, designed to take you from identification through to how you engage and monitor the relationships with the stakeholders over time:

1. Identify — List all stakeholders that have an interest in the project or product, including internal and external parties
2. Prioritize — Rank stakeholders according to their level of power, influence, and urgency. This will help you focus your engagement efforts on the most important stakeholders
3. Visualize — Create a visual representation of the stakeholders, often in the form of a circle or a map. This helps communicate the importance of various stakeholders to the project team and other stakeholders
4. Engage — Develop tailored engagement strategies for each stakeholder group, considering their communication preferences, level of involvement, and desired outcomes
5. Monitor — Establish a process to track stakeholder feedback and involvement, adjusting the engagement strategy as needed to maintain strong relationships

The Stakeholder Circle method has you create a visual representation of the stakeholders, which can be very powerful when communicating with others.

Power-interest matrix

My favorite stakeholder analysis framework is the power-interest matrix, which helps identify stakeholders based on their level of power and interest in the product. It is a very simple framework that I often incorporate into kickoff sessions at the start of a discovery phase:

To use this, you identify who of your stakeholders has high or low interest in what you are building, and who has high or low power. Map the results onto a grid to categorize stakeholders into four groups:

1. The crowd
2. Subjects
3. Context setters
4. Players

The Crowd

The stakeholders in this category are important to consider even though you might not actively collaborate with them throughout the product lifecycle. Stakeholders in this category might receive widely distributed email updates on progress, for instance, or regular release notes, meeting minutes, status reports, etc.

Subjects

Usually, there are people in this group who can be huge advocates for you as they have high interest in the product, but their low power means you might not want to collaborate closely on decisions impacting the product. Communicating with this group can be important to support the positive high interest they have.

Context setters

The obvious example here would be regulators, who you may need to accommodate.

Laura Modi, CEO and Co-founder of Bobbie, spoke about what happened when the FDA came to visit one of her manufacturing sites of organic infant formula on Lenny’s podcast. They shut down production and Laura and her team had to work with the FDA to help them understand the approach they were taking, making some adjustments together before production could restart:

Other context setters often include senior folk in your organization.

Players

This group of high-interest, high-power folk should be those you are spending the majority of your time with. Carefully identify who your key players are and make sure you keep them in the loop, collaborating and communicating with them each day.

What I particularly like about this framework, beyond the simplicity, is you can often find stakeholders in the “wrong” box. So, on top of finding the best ways to communicate and collaborate with each group, you might also identify the need to come up with strategies that move a stakeholder from one box to another.

Stakeholder analysis examples: Google Chrome

Google Chrome is a great example of how stakeholder analysis can be used to create a successful product.

When Google was planning to launch Chrome in 2008, it wanted to create a browser that would compete with established browsers such as Internet Explorer and Firefox. The tech giant used stakeholder analysis to understand the needs and expectations of their target audience.

Identifying stakeholders groups

Google identified several stakeholders who could benefit from a product like Chrome, including web users, developers, advertisers, and device manufacturers. It then prioritized these stakeholders based on their level of influence and their importance to the success of the product.

Web users were identified as the most important stakeholder group, as they would be the primary users of the browser. Google conducted extensive research to understand the needs and expectations of web users, including their frustrations with existing browsers and their priorities for a new browser. The product team used this feedback to design Chrome with features that were important to users, such as speed, security, and simplicity.

Google also identified developers as an important stakeholder group because they would be responsible for creating websites that were compatible with the new browser. The product team engaged with developers throughout the development process, soliciting feedback and incorporating their suggestions into the product. It also created tools and resources to help developers optimize their websites for Chrome, which helped to increase adoption of the browser.

The last group of stakeholders Chrome’s product team identified were advertisers and device manufacturers. Google worked to ensure that the browser was compatible with a wide range of devices and platforms, which helped to increase adoption and usage of the browser. It also created advertising programs that were optimized for Chrome, which helped to drive revenue and support the ongoing development of the browser.

Capturing market share

Ultimately, Google’s use of stakeholder analysis was a critical factor in the success of Chrome. By understanding the needs and expectations of its target audience and prioritizing stakeholders based on their level of influence, the Chrome product team was able to create a browser that met the needs of users and quickly gained market share.

It also managed to create a robust ecosystem around the browser that supported its ongoing development and growth by engaging with developers, advertisers, and device manufacturers.

Stakeholder analysis template

Here’s a simple template you can follow when conducting and documenting a stakeholder analysis for your product:

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• Stakeholder identification
  • [Comprehensively list all stakeholders, including internal and external parties who have an interest in the product]
    • Example: Product manager, developers, UX designers, customers, partners, regulators
• Stakeholder categorization
  • [Categorize stakeholders based on their level of power, influence, and interest in the product]
    • Example: Customers (high interest, low power), CEO (high interest, high power), Regulators (low interest, high power)
• Stakeholder prioritization
  • Prioritize stakeholders based on their importance and potential impact on the project
    • Example: 1. Customers, 2. CEO, 3. Developers, 4. Partners, 5. Regulators
• Stakeholder needs and expectations
  • [Understand and document the needs, expectations, and concerns of each stakeholder group]
    • Example: Customers — easy-to-use interface, fast performance; Developers — clear requirements, realistic deadlines
• Engagement strategy
  • [Develop tailored engagement strategies for each stakeholder group, considering their communication preferences, level of involvement, and desired outcomes]
    • Example: Weekly updates for the CEO, daily stand-ups with developers, quarterly meetings with partners
• Monitoring and feedback
  • [Establish a process to track stakeholder feedback and involvement, adjusting the engagement strategy as needed to maintain strong relationships]
    • Example: Regularly review engagement strategy effectiveness, solicit feedback from stakeholders, and make adjustments as needed

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Go far together

Stakeholder analysis is a critical tool for product managers looking to deliver successful products. The frameworks can help identify your stakeholders, understand their needs and expectations, and plan activities to manage relationships effectively.

By understanding your stakeholders and engaging them in the product development process in the right way, you can create products that make a huge impact, even beyond your customers.

You might be able to move faster on your own, but you won’t go very far without the involvement and input of the stakeholders who depend on your product most.