As product managers, we like certainty. We build roadmaps for both the long and short-term to communicate our strategic thinking, manage backlogs full of user stories, and prioritize hundreds of features. Concentrated on presenting and building the perfect solutions, we often overlook a significant aspect of the product management process — getting buy-in and support from stakeholders.

When you plan for the future of your product, it pays to remember the old adage that “no man is an island.” Not everyone’s needs can be accommodated, but by creating a platform for communication and promoting visibility aroudn tough product decisions, you’ll win the buy-in your plans deserve.

Performing a stakeholder analysis is the first step in the stakeholder management process that will help you gain the trust and approval of your stakeholders. So let’s dive in and unpack this term.

What is stakeholder analysis?

Stakeholder analysis is a process of identifying and assessing all of the people or groups of people interested or involved in your product. A well-planned stakeholder analysis will provide direction on how to communicate with your stakeholders according to their influence and interest in the product. 

Importance of stakeholder analysis

Whether internal or external, all of the initiatives that you work on as a product manager have stakeholders. You must engage your stakeholders from the beginning to reduce and uncover risks and ensure buy-in before significant resources, time, and workforce have been allocated to the project.

Your stakeholders have knowledge and expertise that stretches outside of your domain. As you start to show your work during the discovery stage of the product management process,  you’re giving your stakeholders more to engage with. Through their input, stakeholders can question your hypothesis, your numbers, and your thinking. When stakeholders are appropriately engaged from the start, their impact spreads far and wide, significantly improving your product ideas and reducing costly mistakes in the process.

3 strategic reasons to conduct a stakeholder analysis

Build trust and earn buy-in early on

Your stakeholder analysis will help you build a shared vision among key influencers within your organization. By having an adequate communication plan that includes all parties involved, you will ensure that everyone understands the desired outcome, scope, outputs, and key milestones of the project. By setting expectations early you create advocates of your stakeholders and minimize confusion and conflicts as the project advances. 

Co-create with stakeholders to gain their help

Teresa Torres, a product discovery coach, recommends that product managers shift the way they communicate with stakeholders. Instead of presenting stakeholders with a “final answers” — completed backlogs, product roadmaps, and user stories — and asking for their opinion, Teresa suggests that our job as product managers is to “generate and evaluate options.” 

Product managers must involve stakeholders early in the process and co-create ideas with them. This opens up access to valuable input and resources.

“Instead of going to our stakeholders and saying here’s the next magical thing that we should be doing, we’re sharing with them all of the options that we’re generating and how we’re evaluating them. Instead of overcommitting to our favorite idea, we invite our stakeholders to ideate with us.”

Reduce the level of risk within the product

As a product manager, you need to manage a whole lot of risks — economic risks, market risks, competitive risks, operational risks, product performance risks, and more. 

Feedback and insights from stakeholders can help you anticipate challenges and roadblocks before they arise. Communicating with all of the key players can help create a clear picture of the most effective way to execute your ideas, ensuring the success of your project in the long run.

How to perform stakeholder analysis — a step-by-step guide

The way product managers conduct stakeholder analysis varies from company to company, depending on the size and maturity of the organization and the number of stakeholders involved. 

Usually, the stakeholder analysis consists of three main steps:

  • Identify stakeholders 
  • Prioritize stakeholders
  • Figure out the best plan of action for working with each stakeholder

 Identify and list all your stakeholders

A stakeholder is anyone who has an interest in the product, can influence product decisions, or is affected by the outcome and deliverables of your work. 

Stakeholders are not limited to your team. Customers, board members, and investors can also be part of your stakeholder analysis. 

To be able to plan and prioritize your stakeholder relationships, you need to list all of the potential stakeholders involved in the product management process. Involve your whole team and brainstorm who your stakeholders are. Ensure that everyone is on the same page. 

Potential types of stakeholders include:

  • Product team: Engineers, designers, product owners, and product managers.
  • Marketing 
  • Sales
  • Customer success and other customer-facing departments
  • Customers.
  • C-suite, higher management
  • Board members
  • Investors

Prioritize stakeholders

Once you compile your list of all of the stakeholders, you need to group and prioritize them by their level of authority and involvement in the project. 

Two visual tools that help you map and assess your stakeholders are the stakeholder table and the Power/Involvement grid. 

The stakeholder table is a list of all stakeholders impacted by the project with their position, role in the project, and any other relevant information. Rank each stakeholder’s Power and Involvement from 0 (lowest) to 10 (highest).

Stakeholder name

Position

Role in the projectLocationContact informationPowerInvolvement

Next, we’re going to classify each stakeholder and add them to The Power/Involvement Grid according to their authority and level of participation in the group.

stakeholde analysis power/involvement grid

When aligned together, the criteria makes up several categories (or quadrants) that objectively show what actions you need to take with the stakeholders:

  • High power, high involvement — Manage closely. Try to fully engage and make these people happy, as they are the most influential and important stakeholders in your project.
  • High power, low involvement  — Keep satisfied. Keep these stakeholders satisfied, but don’t hover too much by checking in too frequently with them, as this would put them off.
  • Low power, high involvement — Keep informed. Regularly update these stakeholders on the progress of the project.
  • Low power, low involvement — Only monitor. Monitor these stakeholders periodically but don’t over-communicate with them.

Figure out the best plan of action for working with each stakeholder

The last step of the stakeholder analysis is to create a stakeholder communication plan. A clearly defined plan allows everyone on your product team to know how and when to engage with stakeholders.

It’s also crucial that you understand what the key interests of each stakeholder are:

  • What motivates them on a personal level? Do they have a vested financial interest in the project?
  • What information is relevant to their role in the project?
  • Where do they fit in the organizational structure, and who influences their decisions?
  • Apart from this project, what other projects are they involved with? Is your project aligned with the rest of their priorities?
  • Do they have a positive point of view on your project? If not, what can you do to manage their opposition or better understand their stance?
  • Is their opinion supported by data?
  • What is the best channel to communicate with them?

Once you have a clear picture of each stakeholder, you can develop your stakeholder management action plan — how often you’re going to loop them in, the meetings required, their preferred channel of communication and the main goal of your outreach.

Earn your stakeholders trust with the right tools

Stakeholder analysis is a process that helps product managers understand all stakeholders across the organization that have an interest in the project. This understanding then helps them build the most effective plan for communication and earning buy-in

It’s crucial that you conduct a stakeholder analysis early on and keep key influencers engaged throughout the whole lifecycle of the project. productboard is a product management system that helps you to earn your colleagues’ trust. By gathering feedback, promoting transparency, and encouraging active engagement from all stakeholders, you can create advocates and build support within your organization.

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productboard is a product management system that enables teams to get the right products to market faster. Built on top of the Product Excellence framework, productboard serves as the dedicated system of record for product managers and aligns everyone on the right features to build next. Access a free trial of productboard today.