Stakeholder analysis: a product team’s key to success

Stakeholders are essential organizations and individuals involved in your product’s inner workings—they’re crucial to product success, so their participation and support are non-negotiable.

While stakeholders are important entities, they can have conflicting opinions and interests, ultimately affecting the product’s development. However, there’s a key to unlocking their support: stakeholder analysis.

This article will tell you how and why product teams should perform stakeholder analysis to achieve product success—so let's dive in!

Stakeholder analysis: definition and benefits

If you constantly find yourself stuck in a feedback and approval loop and are pulled into meetings for even the smallest decisions, you’re missing out on stakeholder analysis. It’s a crucial step that needs to be done in parallel with product research, so you can manage interests and ensure nothing derails you from creating a successful product.

What is stakeholder analysis?

Stakeholder analysis is an organized process of identifying and grouping product stakeholders to analyze their views, influence, and interests. This helps you better communicate with them and get buy-in for your product ideas and processes.

Stakeholder analysis knowledge can be used to devise new product ideas, get approvals, or earn support for major decisions.

Benefits of stakeholder analysis 

Stakeholder analysis will help you recognize, understand, and categorize stakeholders based on different factors. This will help you: 

• Understand whose support is most important and how you should prioritize your communication efforts to get their support.

• Create a mitigation plan to navigate the lack of support from stakeholders and avoid bottlenecks.

• Understand the interests and views of different stakeholders to improve communication and collaboration, improving team rapport and efficiency.

The importance of stakeholder analysis for product management teams

Stakeholder analysis is indispensable for successful initiatives and the building of an excellent product—and it holds importance for many reasons, apart from broad product goals:

1. Early buy-in from stakeholders on plans and goals

With stakeholder analysis, you’ll need product plans, goals, and roadmaps ready in advance so you can align your stakeholders' vision with that of your product vision. This will ensure you’re planning for the long run and can get early approval on things that might pose a conflict.

For example, if you’re in the product research stage right now, but you’ve already gathered sufficient information from customers on what your first product feature should be, you can create a roadmap to get buy-in from it now, rather than later.

2. Clarify and sort issues or doubts in initial development phases

The last thing you want is to be working hard on a segment of your product stage—say the release of a specific product feature—and a stakeholder disagrees with your approach or process. 

With stakeholder analysis, you can rule out potential conflicts and make a contingency plan well in advance to avoid creating a 'what to do now' situation. With the analysis, you can understand each stakeholder and create a workflow to communicate and solve their doubts efficiently.

This way, you can focus on activities that help create a better product and cater to your customers' needs while your stakeholders' concerns are solved on the go.

3. Gain trust and get help from key organizational players in the product process

Stakeholders are placed in an important position because they have significant knowledge and experience. Leveraging this and including them in different stages of the product journey can help optimize product processes for better results while earning their trust and support.

Following this, getting buy-in for your ideas will be easier and faster so you can move on with the actual work rather than getting stuck in an approval loop.

4. Buy-in is essential for product success

Stakeholder analysis is key to product success. The better you understand different stakeholders in your organization and tailor your communication and processes to earn their support, the more likely your product is to succeed.

Essentially, stakeholder analysis ensures that the product passes through each stage in the development journey seamlessly, with support from key players, which eventually leads to product success.

3-step process to conduct stakeholder analysis

How you conduct stakeholder analysis will vary depending on your company, product, and stakeholders; and on which team conducts the analysis—a product management team will perform analysis very differently from a product marketing team. This is because not all stakeholders hold the same kind of influence across departments.

Nevertheless, the basics remain the same. Here's how many organizations conduct stakeholder analysis in three steps:

1. Identify your product's stakeholders

The first step is making a list of stakeholders—individuals and organizations interested in how your product is developing, who hold power to influence change, or those directly affected by the outcome.

Identifying stakeholders in the early stages of product development is essential so you have a clear idea of who you're working with. It will also give you a broad understanding of which key players can influence your product's success, and in what capacity. 

Here's a list of potential stakeholders:

• C-suite executives

• Department heads

• Advisors

• Analysts

• Consultants

• Trade associations and government organizations

• Company shareholders

• Prospective customers

2. Understand the various models to categorize stakeholders 

After identifying your key stakeholders, categorize them based on influence, interest, and level of involvement in your product process.

The categorization model you pick should be based on the availability of resources, product stage, company type, and timeframe. Here are a few common models for you to choose from:

Power-interest grid

A power-interest grid creates a priority list based on stakeholders' power and interest in your department or product stage.

They can be divided into:

1. High power, high interest: these are the most important stakeholders who yield considerable influence and have significant interest in your product happenings—keeping them informed and involved should be your priority.

2. High power, low interest: these are the stakeholders with significant influence but low interest in your product. Avoid over-communicating or extensively involving them in discussions.

3. Low power, high interest: these stakeholders hold less influence on your product and its outcomes but have high interest, so keep them informed and check in with them from time to time.

4. Low power, low interest: these stakeholders lie at the bottom of the list—keep them informed, but don't involve them in discussions or planning.

Essentially, the ones on the top of this list are your most important stakeholders, and their interests must align with yours for maximum support and product success.

Attitude and knowledge map

Under the attitude-knowledge map, stakeholders are categorized based on their knowledge and attitude towards a specific segment, particularly your product department.

This model is mapped out into four simple quadrants:

1. Aware-support: these are top-level stakeholders who are completely aware and informed about the product vision and support you in it.

2. Aware-opposed: these are stakeholders who are aware of but oppose your ideas or the processes and approaches you take for product-related activities. They can potentially create arguments and conflicts in the future and require attention.

3. Ignorant-support: these are stakeholders who support you but are ignorant about what is happening, its impact, or what the basis of the product tasks, activities, and goals are. 

4. Ignorant-opposed: these stakeholders oppose your methods and ideas, although they're ignorant of what that entails. They should be the key focus of your stakeholder efforts because keeping them in the loop can help change their attitude.

Salience model

This model uses a Venn diagram to categorize stakeholders into eight categories.

The categories stem from three factors:

1. Power: how much power does a stakeholder have over your processes, activities, outcomes, and goals? (similar to power-interest model)

2. Legitimacy: how legitimate is their involvement in the project?

3. Urgency: how urgent is it to address the concerns of this stakeholder?

The stakeholders who fall in the overlapping sections (dangerous, core, and dependent) need to be given maximum priority as they're important and can change the course of your product's development or raise concerns if their needs are not addressed, and they're not happy.

3. Outline a communication and buy-in plan

Once you've chosen your preferred categorization model and created a thorough list that highlights where each stakeholder is placed, create an action plan to dictate the best way to communicate and achieve buy-in from each stakeholder category.

Before you map out your plan, discuss these questions with your team:

• What outcome will the stakeholders in different categories get from your work?

• What kind of motivators do they have to help you achieve product success?

• What’s their current view of your processes and the work you're doing? How did these opinions form, and what factors influence them?

• If they're already in support, how can you nurture them to ensure continued support?

• If they're in opposition mode, which factors can help turn them over to 'the other side'?

• If they're not convinced, how can you manage their opposition until they're nurtured?

• What's the best medium to communicate with them?

• Do these stakeholders influence other individuals or organizations too? If so, what kind of impact can it have on your product?

These answers will help you get a clearer idea of what your communication roadmap should look like, how best you can align your interests with stakeholders across categories, and who needs to be prioritized. 

Performing the analysis is but one step to effective product stakeholder management. You need to actively use your analysis findings to create a communication plan. Let’s see how! 

Actionable next steps after performing stakeholder analysis 

Now that you've performed the analysis to understand your stakeholders, it's time to take actionable steps to bridge the gap between your and your stakeholders' interests.

Create an action plan for communication

When you create a communication plan, your primary focus should be stakeholders who have high influence but do not support your methodologies and ideas. These are the key players who can derail your focus, cause conflicts, and eventually lead to a delay in decisions—or worse: product failure. 

To protect your product vision, you need to understand where stakeholder opposition is coming from. It could be due to a lack of understanding of your processes and methodology, resistance to change, or personal reasons.

According to the source of opposition, you can take the following steps to nurture stakeholders to get on your positive side:

Provide training and support

An expert or executive working on similar product initiatives for years may not be comfortable with your approach or methods for product development. This doesn't mean they don't want to change, but they're convinced the way they've been doing it for years is the best (or only) way to achieve results.

Provide resources to get them excited about your approach, including case studies and insights from innovative leaders who’ve succeeded using similar methods.

Through tactical processes, training, and real-life examples, the goal is to show stakeholders how your ideas and decisions will help move the needle towards product success.

Make stakeholders product team members

One way to improve communication is to include stakeholders on your product team. Give them a role in your product research team, or make them responsible for a series of tasks around collecting product feedback. 

Including stakeholders on your team will enable them to understand product ideas from the product team's perspective, and may give them added insight into the thought process.

Handle objections by creating a contingency or fallback plan

Even after continued efforts through training or project involvement, some influential stakeholders might still oppose your methods. 

Rather than forcing them to believe in something they strongly oppose, create a fallback plan to handle their objections. This can be achieved by asking another influential stakeholder to oversee their concerns or supervise their opposition. 

Monitor progress

Executing the communication plan is just the beginning: now you need to measure your plan's progress to see if it's making a difference in attitude, thoughts, and support on product-related activities.

The best way to do this is to watch stakeholders' behavior changes and actions closely. Try creating a log sheet and see how your key stakeholders react when you ask for validation for a specific idea. Over time, you can deduct the results of your stakeholder analysis and communication efforts to see if they're nurturing and moving towards the support phase.

So, just like you would for your product, put your stakeholder management plan in action, measure the progress, and develop improvements based on their reaction and behavior. Product stakeholders are an inevitable part of the product process, so doing this will help you learn more about them and improve communication to get their complete buy-in and support. 

Common mistakes to avoid

Stakeholder analysis isn't a choice: it's an essential process to seamlessly flow through the product development journey and come out with a pile of achievements and team happiness rather than company politics and a half-baked product. 

Besides, improving stakeholder communications will save time getting approvals and having never-ending discussions about product ideas. Instead, you can focus on better understanding your customer and building a product they love.

While no strategy is perfect, keep these common stakeholder analysis mistakes in mind for better results:

• Failing to consider and address all stakeholder groups: don't take your most supportive stakeholders for granted because you're so focused on managing the interests of the more difficult groups.

• Not creating a strong roadmap to handle problem stakeholders: one of the best ways to handle objections is to create a rock-solid product roadmap that can help the team get early buy-in. (Also refer to your contingency plan, which we referenced above!)

• Ignoring the need for a holistic action plan to address stakeholder concerns: create a holistic plan to cover each stakeholder category. If you address the needs of some prominent stakeholders and completely ignore the others because they yield less influence, it can lead to misalignment and lost support. 

• Overlooking recommendations for improvements because of opposition from key stakeholder groups: after implementing your stakeholder communication plan, analyze what’s not working and outline some improvements. You’ll struggle to improve your product if you don’t follow through on these improvements because of stakeholder objections, so use the advice in this article to handle objections and win their approval where necessary. 

How to use Hotjar for efficient stakeholder analysis

Manually conducting stakeholder analysis while you're responding to customer needs and building a product can be tiresome. 

But you don't have to compromise. Here's how Hotjar can help you conduct an effective and efficient stakeholder analysis without losing the customers' voice in the process.

Use Surveys to understand stakeholders' needs

Requesting stakeholder approval for every product iteration can become a bottleneck to development and lead to delays.

To ease the process, assign user attributes to a Hotjar Survey to collect stakeholder feedback while working on product iterations or releasing new features phase-by-phase. You can plug this survey while working on a prominent product iteration before you release a feature or after you launch a minimum viable product (MVP). Here are some questions you can include:

• What are your thoughts on the iteration?

• What would you rate the iteration on a scale of 1-5?

• Did the customer feedback translate into the iteration accurately?

• Do you think we can do something better?

• Do you have any prominent concerns?

• Do you think it’s an effective solution to the customer’s pain point?

You can find a relevant survey template based on your goals from our library and make the feedback and approval process much more efficient. With the survey, you can understand stakeholders' thoughts and feelings about the iteration in their own words, then translate their suggestions into your workflow, and get approval on the go.

This will ensure you get their input and address their concerns as you keep working on new features.

Use Heatmaps to study shared behavior and implement a fix

If you have a test website where you implement product features before taking them live to customers, or you have a shared dashboard on one collaboration tool, you can use Hotjar Heatmaps to study your stakeholders' behavior. 

By analyzing heatmaps, you can see where your stakeholders spend the most and least time on each page while navigating new features and iterations. This will help you understand stakeholders much better and develop a way to address any issues before they become prominent.

Use Session Recordings to analyze shared dashboard navigation and troubleshoot potential concerns

Use Hotjar's Session Recordings to understand how stakeholders navigate and experience your test website or a shared dashboard. By assinging user attributes and analyzing mouse movements, clicks, time spent on the dashboard, and how they use your product from page to page throughout their session, you can understand where stakeholders are facing issues. 

For example, if you constantly find them going back and forth on the customer feedback tab, they might have concerns about what the feedback means, what you're doing about it, or how you're implementing it to address the customer's needs.

Use the Hotjar and Slack integration for communication

One of the best ways to avoid never-ending approval and feedback loops is to share customer feedback and get buy-in instantly. 

Use the Hotjar and Slack integration so stakeholders can view customer feedback as soon as you receive it. This way you can start a conversation and discuss any stakeholder concerns regarding customer feedback or your ideas, which will allow you to address the feedback in a shorter time frame, eventually resulting in faster iterations. 

The Hotjar and Slack integration helps make stakeholder communication easier, faster, and more efficient.

Final thoughts

Building a product that truly delights your customers takes more than just one team: you need guidance, participation, feedback, and approvals from other teams and stakeholders, and everyone must be on the same page with the product and business goals. 

Stakeholder analysis is critical so you can address concerns early on and avoid misalignment about your product vision, which could negatively impact your product's success.  

Above all, stakeholder analysis helps you eliminate roadblocks to achieve customer satisfaction by building a product they truly love.

To improve the efficiency of your stakeholder analysis process, use Hotjar's qualitative and quantitative tools to understand and address the needs of your stakeholders and lead the business to success.