9
Accounting for Key Stakeholders
For a moment, let’s think back to the JCo acquisition case you read in chapter 5. In that case, Luis recommended that his company establish four teams to work on an acquisition integration project—the core project team, change management team, transition-monitoring team, and red team. Assuming his company agrees to set up these teams, have they appropriately identified and included everyone they need to get involved with this change initiative? It’s natural to say “Yes, that’s enough people,” but the reality is probably not. And Luis appeared to know this too.
Luis seemed to understand that despite creating these four teams, his organization still hadn’t accounted for—or appropriately involved—all of the stakeholders who would be affected by the acquisition. There were employees in JCo’s finance, sales, procurement, and HR departments who might need to switch the processes and systems they used to perform their work each day. Wilab employees in these same departments might also find that their jobs were changing. And JCo executive assistants were targeted for job elimination. Clearly these targeted employees faced a significant impact, and their immediate managers and co-workers would be affected too. Wilab and JCo customers might hold very different impressions about the acquisition. And the leaders in each company likely differed in their views too.
Luis probably knew that each of these stakeholder groups had the ability to influence the ultimate success of the acquisition, each in a different way and each with a different level of influence. And Luis may have thought that if each stakeholder group was properly engaged—if each person or group affected by the acquisition felt that their unique concerns and needs were considered, or at least known—then they might be more willing to make the changes needed for the acquisition to succeed. But if key stakeholders felt ignored and weren’t properly engaged, Luis knew that they would resist adopting the changes and the acquisition could fail.
That’s probably why Luis suggested conducting a stakeholder analysis—a tool that could help him and his project team identify everyone who was affected by the acquisition integration and understand how they were affected. In this chapter, we’ll look at the stakeholder analysis that Luis recommended. We’ll see that the tool can help Luis and his team—and help you—identify stakeholders’ needs and concerns, and make more informed decisions as you create project plans. And in the chapters that follow, you’ll see how the stakeholder analysis provides the foundation for communication, training, and other stakeholder engagement plans you need for your change initiative to succeed.
What Is a Stakeholder Analysis?
A colleague of mine with decades of experience leading successful change projects says that the most vital tool you can use during a change project is a stakeholder analysis. My co-worker explains it is essential to understand who will be affected by the change, what they are doing today, and how they will be affected by the change. Then you can use it to involve these stakeholders in the right way, which will be different for each stakeholder group. The stakeholder analysis is your anchor. You need this for your change to succeed.
Why is my colleague so adamant about conducting stakeholder analysis? Why does she think it’s such a vital tool—the anchor in your change management toolkit?
Well, change initiatives often fall short of delivering expected results when organizations fail to:
• Identify key stakeholders and understand how the change will affect them.
• Understand each stakeholder group’s concerns, needs, expectations, and willingness to adopt the change.
• Develop training and communication tailored to the unique requirements of each stakeholder group.
The stakeholder analysis helps you address these gaps. It’s a tool that helps you clarify:
• Who is affected by the change and how
• The level of impact each stakeholder group will experience
• The degree to which each stakeholder group can influence successful adoption of the change
• Stakeholder concerns and points of resistance
• Preferred methods for involving and communicating with each stakeholder group
Armed with the information the stakeholder analysis provides, you can tailor your project plans, communication, training, and other actions to ensure that you’re addressing the unique needs and concerns of each stakeholder group. This will help you build buy-in and support for your change initiative as you convey to each stakeholder that you understand how they are affected by the change and that the actions you’ve planned address their unique circumstances. It’s worth the time you invest here.
Let’s take a look at the stakeholder analysis document Luis might prepare for the JCo acquisition project, and see how you can conduct a stakeholder analysis for a change project you are supporting (Table 9-1).
Identify Each Stakeholder or Stakeholder Group
In the stakeholder analysis Luis might prepare for the JCo acquisition, he’ll start by compiling a list of all the various people and groups that will be affected by Wilab’s acquisition of JCo. It doesn’t matter if the impact is expected to be significant or relatively minor. At this point Luis just needs to identify each and every party who might be touched by the acquisition integration. For example, Luis understands that members of JCo’s finance department might need to perform their jobs in an entirely different way after the acquisition is complete. The impact on this stakeholder group will be significant, so he lists them on the stakeholder analysis. But Luis also may know that the only change likely to happen to JCo manufacturing staff is that a different com-pany name will now appear on their paystub. The impact of the acquisition on this stakeholder group is extremely small, but he lists them on the stakeholder analysis anyway. The list presented in Table 9-1 is only a partial inventory of all the stakeholders Luis and his team need to identify. It is sure to expand as Luis’s project team performs their stakeholder analysis in earnest and as their project unfolds.
As you prepare a stakeholder analysis for your change project, start by identifying all the stakeholders who will be affected by the change. The impact the stakeholder experiences may be substantial. Or the impact on a stakeholder group may be extremely minor. At this point, it doesn’t matter what the expected level of impact is. Just assemble a list of every person or group. Capture the identities of each stakeholder and stakeholder group on a spreadsheet. Depending on the change initiative, the number of stakeholders affected, and the varying impact on each stakeholder, you may want to identify stakeholders by their individual name or title (for example, Sunita Evans or JCo CFO) or you may represent them by the group to which they belong (for example, JCo sales department staff).
Table 9-1. JCo Acquisition Stakeholder Analysis
To identify a comprehensive list of stakeholders, gather input from members of your core project team and change management team, project sponsors and organization leaders, members of the transition-monitoring team, and the stakeholders themselves. You can:
• Ask the core project team and change management team to brainstorm and prepare a draft list of every person and group they believe will be affected by the change. During this brainstorming session you can also begin to capture initial ideas about what will change for each stakeholder.
• Review the draft list with your project sponsors and with organization leaders to determine if the list is complete. Amend the list of stakeholders based on their input.
• Review the list with members of your transition-monitoring team, and update the list to include any additional stakeholders they have identified.
• During project status meetings with stakeholders, share the list of stakeholders that you and your team have identified. Ask if they can think of others who will be affected by the change, and amend the stakeholder list accordingly.
Think of your stakeholder analysis as an evolving document. If you learn about new stakeholders—even well after the change has begun—update the stakeholder analysis to include them. You may need to put the project on pause for a moment so you can get these newly identified stakeholders caught up, and so you can update project plans to reflect their needs and interests. It is worth it. Projects often fail when people forget key stakeholders and don’t appropriately engage them in the change process. It is better to amend your analysis to include stakeholders whom you’ve inadvertently omitted than to ignore the mistake.
As you identify additional stakeholders, you may need to modify the composition of the teams working on your project. It’s absolutely fine to expand your core project team or the transition-monitoring team or the red team to include a newly identified stakeholder. You want to ensure that your project plans consider and address the needs of everyone who’s affected by the change.
Summarize What Will Change
As you compile a list of stakeholders, identify what will be changing for each and capture this information in a column on the stakeholder analysis spreadsheet. For example, in the JCo acquisition case, JCo finance staff likely will begin using Wilab’s financial systems and processes, so that’s what’s listed for them on the sample stakeholder analysis. JCo executive assistants might face job eliminations, so that’s what is captured on the spreadsheet for them.
Use a few phrases or a short bulleted list to summarize what is changing for each stakeholder. Over the course of your project, your core project team and change management team will need to develop a detailed and fully comprehensive understanding of what will change for each stakeholder group. For the purposes of the stakeholder analysis, just present this information in summary form.
• Gather information about the expected impact during meetings and conversations with members of your core project team and change management team, as well as project sponsors and organization leaders.
• Review the expected impact with your transition-monitoring team and ask if they believe the analysis appropriately captures how the change will affect the stakeholder group they represent. Modify the stakeholder analysis document to reflect their input as needed.
• During project status meetings with stakeholders, share how you anticipate they will be affected by the change. Ask for their input to determine if anything is missing, and update the stakeholder analysis document accordingly.
When communicating with stakeholders about what will change, be as specific and as honest as you can be, tailoring your message about what will change to the particular stakeholder group you are meeting with. Where possible, frame what will change in terms of who will be affected, what specifically will change, when the change will happen, and how the change will be implemented—including the role the stakeholder will play in implementing the change. But also be clear about why the change is happening. What are the organizational benefits—and what is in it for the particular stakeholder you are speaking with?
Of course, when you are just beginning the stakeholder analysis, the information you share with stakeholders may be a bit vague, because you haven’t yet performed a comprehensive assessment of how each stakeholder group will be affected by and involved in the change initiative. It’s OK to let stakeholders know that at this stage you are just sharing what you anticipate will change for them, that you are asking for their input to be sure the analysis is complete, and that you will update them frequently with specific details as the project unfolds. For example, in the JCo acquisition case, JCo finance employees may be told that, as a result of the acquisition, they probably will begin using Wilab’s financial systems at some point in the future. They also will be told that leaders haven’t yet decided if, how, or when that will occur. For now, the project team just needs their help gathering information that Wilab and JCo leaders will use to determine how best to proceed. As they speak with employees whose input is needed, organizational leaders will reassure them that they’ll be kept in the loop as they make decisions that affect them.
When you need to inform stakeholders about how a change may or may not affect them, thank them for being patient and flexible while your organization figures things out. Apologize for being tentative. State that you don’t want them to worry needlessly about events that may or may not occur, and say that you’re erring on the side of communicating too much. Hopefully stakeholders will appreciate your efforts to involve them in the decision-making process and to keep them informed. For more details about communicating change, see chapter 12.
Identify the Level of Impact
Identify the extent to which each stakeholder will be affected by the change—whether it is high, medium, low, or none—and summarize this information in a column on the spreadsheet. You can determine level of impact during meetings and conversations with members of the core project team, change management team, project sponsors, and organization leaders, and you can validate your assessment in meetings with the transition-monitoring team. For example, in the JCo acquisition, Luis knew that if and when JCo finance employees start using Wilab’s financial systems and processes, their day-to-day work will change considerably. The extent of impact for these stakeholders is high. Likewise, the impact on JCo executive assistants who face job eliminations is high. On the other hand, Luis knew that the impact on JCo manufacturing employees will be low, because the only change they will experience is that a different company name will appear on their paystub.
As you determine level of impact, consider:
• To what extent will this person’s day-to-day work change because of this initiative? Will all, some, or none of their work processes and systems change?
• To what extent will the change affect the employee’s stated job responsibilities? Will a substantial portion of their job description change, or will the change have a more moderate impact?
• How much does the person need to learn or relearn to remain proficient in their job after the change is implemented?
• To what extent will changes in your organization’s structure affect this person? Will the person report to someone new after the change is implemented? Will they have new co-workers?
• Is the stakeholder losing something important as a result of the change? Are they losing their job? Beloved co-workers? A short commute? A prestigious job title?
Identifying the extent to which each stakeholder will be affected by the change can help you determine the most appropriate way to involve them in the change initiative. In most cases, you should provide highly affected stakeholders significant opportunities to get involved, such as having a designated representative on the core project team, membership on the transition-monitoring team or red team, or frequent opportunities to receive project updates and provide feedback.
Identify the Level of Influence
Identify the extent to which each stakeholder can influence whether the change is successfully adopted. That is, to what extent can the stakeholder’s decisions and actions influence whether the organization can achieve the ultimate objectives of the change. Summarize this information—whether it is high, medium, low, or none—in a column on the spreadsheet. Again, you can determine level of influence during meetings and conversations with members of the core project team and change management team, as well as project sponsors and organization leaders, and validate your assessment in meetings with the transition-monitoring team.
For example, in the stakeholder analysis Luis might prepare for the JCo acquisition case (see Table 9-1), he indicates that JCo finance employees have a relatively high level of influence. That’s because JCo finance employees will need to learn and begin using Wilab’s financial processes and systems in order for the project goals to be realized. However, Luis indicates that JCo executive assistants will have a lower level of influence on the project outcome, because they are expected to depart the organization as their jobs are eliminated.
In most cases, high-influence stakeholders should receive priority consideration as you and your team make project-related decisions. Depending on their role in the organization, highly influential stakeholders may serve as project sponsors for the initiative or may have a designated representative on the core project team, the transition-monitoring team, and/or the red team. Provide them with frequent project updates and opportunities to give input and feedback.
Once you’ve identified the extent to which each stakeholder is affected by the change and their level of influence, map out your analysis in a two-by-two grid. Table 9-2 gives an example that Luis might prepare.
Table 9-2. JCo Acquisition Stakeholder Impact Influence Grid
Use the grid to tailor a change strategy for each stakeholder group based on the quadrant in which they fall. As you craft your project, communication, training, and stakeholder engagement plans, provide high-impact, high-influence stakeholders with lots of opportunities to get involved. For example, you may provide these stakeholders with opportunities to participate, or have a co-worker represent their needs, on your core project team, transition-monitoring team, or red team. Provide them with numerous opportunities for two-way communication. You need their input and support! On the other hand, you can focus less time and resources communicating with stakeholders who are minimally affected by and have minimal influence over the change.
Here’s how Luis might use information in the stakeholder influence impact grid in Table 9-2 to guide change strategies for the JCo acquisition:
• If the only change JCo manufacturing staff will experience is that the company name appearing on their paystub will be different, they likely will experience a very low level of impact and will have low influence over whether the project will be a success. Communication to this group may be more one-directional and delivered via their regularly scheduled department meetings, emails, and the company website.
• JCo executive assistants, whose jobs will be eliminated, will experience a high level of impact, but their level of influence over the ultimate success of the acquisition will be relatively modest, because they will be exiting the organization. Communication with this group of employees should be handled via one-on-one, in-person conversations occurring between each affected employee and their immediate supervisor. The goal of this communication won’t necessarily be to have the affected employees buy into or support the change—after all, they are unfortunately losing their jobs—but to help them understand what’s happening and feel like they are being treated with respect.
• Some Wilab executive team members may experience little change in their day-to-day work or oversight responsibilities because of the acquisition. But they may have significant influence over the resources that will be allocated to the acquisition integration and to strategic decisions that will be made. They should receive frequent, in-person updates regarding the status of the acquisition integration project, and may play a key role making or approving various project-related decisions.
• It’s possible that work volume for Wilab’s executive assistants will increase significantly, if they are expected to complete the work previously performed by JCo staff whose jobs are being eliminated. The ability—and willingness—of Wilab executive assistants to absorb this additional work could influence in a moderate way the success of the acquisition. Wilab executive assistants likely will need to be involved in acquisition integration planning in some way, so they understand what is expected of them and why, they feel involved in determining how to take on the additional challenge, and they feel invested in ensuring that the change is executed successfully.
Gather Other Needed Information
Depending on your change initiative, there are other columns of information you may want to include in your stakeholder analysis. Gather this information during conversations and meetings with each stakeholder group, and capture it in summary form on the stakeholder analysis document. Then use this information to determine how to best involve each stakeholder group in the change project.
Consider gathering information such as:
Key concerns: What might the stakeholder group lose as a result of the change? Are they at risk of losing their sense of competence as current systems and processes are replaced? Might they lose a sense of status because of job title changes? Will they have a longer commute? Lose beloved co-workers? Identifying and documenting these concerns can help you plan how best to address the specific sense of loss stakeholders might experience as the initiative unfolds.
Current commitment level: To what extent does the stakeholder currently support the initiative? Are they hostile, openly opposing the change? Against the change, but not openly hostile? Neutral, neither supporting nor opposing the change? Supportive, even willing to assist if asked? An advocate, openly prompting others to adopt the change? Tailor your change plans and tactics based on each stakeholder’s current commitment level.
Ideal commitment level: For the change to be successful, what level of support do you need from the stakeholder? A low-impact, low-influence stakeholder who is currently openly hostile about the change may only need to be moved into the neutral zone, where they will neither oppose nor support the change. Tailor your strategies to do that. Likewise, for the change to be a success, you may need high-impact, high-influence supervisors, who currently are supportive of the change, to be converted into advocates. You’ll need to use a different approach to make that move.
Preferred method of communicating: How does the stakeholder group want to receive updates and information about the change? Do they prefer one-to-one conversations? Do they have biweekly department meetings that can be used to provide updates? Are they heavy social media users? Is there a culture of providing updates and information via email? Tailor how you share information, depending on the stakeholder’s preferred method of communication.
Feedback channel: How does the stakeholder prefer to provide input and feedback? Is there a culture of providing input via anonymous survey? An online “suggestion box”? Or is feedback typically provided in person during one-on-one meetings or in group settings? You likely will need to establish multiple methods for receiving input and feedback regarding the change initiative, tailored to the different types of feedback channels each stakeholder group prefers.
Planned action: Based on all the information you have captured in your stakeholder analysis, what actions will you take to ensure that the stakeholder is appropriately engaged with the change initiative? What will you do to involve the stakeholder in the change? Will you ask them to fully participate in the core project team, or will you send them a few simple emails updating them about the project status? Will you meet one-on-one with them to solicit their active endorsement of and advocacy for the change, or is that not needed for this particular stakeholder group? Will you develop and deliver a comprehensive classroom-based training program to help the stakeholder group develop the knowledge and skills they need to adopt the change, or can the stakeholder group complete a brief online tutorial to help them build the skills they need? Your action plan will evolve over the course of the initiative, as you learn more about each stakeholder and as your plans for the project advance. Use this column on the stakeholder analysis to capture a concise summary of what you have planned.
For the information presented in the stakeholder analysis to be complete and accurate, plan on having conversations with people, and lots of them. You can begin crafting the stakeholder analysis by conducting brainstorming sessions with the core project team and the change management team. But also plan on conducting one-on-one discussions with organization leaders, managers of each stakeholder group, project sponsors, and other key stakeholders. Present the information you collect to members of the transition-monitoring team or the red team to validate the information you have already collected, correct misinformation, and flesh out and add missing details. Likewise, consider presenting appropriate portions of the stakeholder analysis during project update meetings with stakeholder groups.
But be sure to use good judgment when sharing the stakeholder analysis. You don’t want a group of stakeholders to see that they—or their co-workers—have been labeled as hostile. Likewise, it likely doesn’t make sense to share information about possible job eliminations via a presentation of your stakeholder analysis. The appropriate leader needs to share that information one-on-one with the affected parties. As you share the stakeholder analysis with members of the transition-monitoring team, red team, and stakeholder groups for their validation and feedback, consider which portions of the analysis make sense for these individuals to see. Be sensitive. Protect confidentiality.
And remember, the stakeholder analysis has value only if you use it to create action plans targeted to the unique characteristics of each stakeholder and stakeholder group. Use the information you have gathered in your stakeholder analysis to create your communication plans, training plans, and resistance management plans. These plans are addressed in section 3 of this book.
Addressing the Hard Side With the Stakeholder Analysis
By focusing your attention on the people who are affected by the change as well as their needs and concerns, the stakeholder analysis helps you manage the soft side of change. But the tool can also help you avoid mistakes that could affect your project plans (that is, the hard side of change). When compiling a list of stakeholders who will be affected by the change, err on the side of being over-inclusive. It is better to learn that a group you have included won’t be affected after all, than to discover late in the game that you have omitted a stakeholder who has a real vested interest in what’s happening. You can avoid resentment and project delays by thinking very broadly as you identify stakeholders.
About to Begin?
While it might seem daunting to perform a comprehensive stakeholder analysis, it’s almost always worth it! If the process is new to your organization, consider starting by simply compiling a list of the stakeholders affected by your change initiative and summarizing what is changing for each. Use that list to determine how best to involve and communicate with each stakeholder group. As you and your organization become more comfortable using the tool, add level of impact and influence to your analysis. Prepare a two-by-two grid that maps out impact and influence for each stakeholder, and refine your action plans based on this additional information.
Over time, as you perform stakeholder analyses on multiple change initiatives, consider which additional fields of information add value to your planning and decision making. Does capturing the key concerns of stakeholders help guide your planning (it probably does!)? If so, add that field in to your stakeholder analysis. Is gathering information about stakeholders’ preferred feedback channels useful? If so, add that field in too. Play with the stakeholder analysis until you have a format that works best for the change initiatives you help lead in your organization. And tailor the structure to fit the unique requirements of each change project you work on.
At this point, you might wonder if there’s a downside to knowing too much about all the people who will be affected by your change initiative. Once you’ve identified everyone who needs to—or wants to—get involved with your project, isn’t it difficult making sure everyone stays on the same page about the role they’re supposed to play? Can’t you get bogged down as everyone starts to weigh in and provide their opinion about how things should go? How do you help people understand who gets to make each decision, who can influence them, and who just needs to be kept informed?
In the next chapter, we’ll look at the RACI matrix, a tool that can be invaluable for helping you establish and maintain order—and avoid ruffled feathers—as your stakeholders start to weigh in on the change they’re experiencing. Let’s see how the RACI matrix can help you keep your project moving forward amid all the input that’s swirling around you.
Learn more. Check out:
Rittenhouse, J. 2015. “Improving Stakeholder Management Using Change Management Tools.” Paper presented at PMI Global Congress 2015, Orlando, FL. Newtown Square, PA: Project Management Institute.
Smith, L.W. 2000. “Stakeholder Analysis: A Pivotal Practice of Successful Projects.” Paper presented at Project Management Institute Annual Seminars & Symposium, Houston, TX. Newtown Square, PA: Project Management Institute.