Stakeholder Analysis and Classification

Stakeholder Analysis and Classification - CBAP Guide

Introduction to Stakeholder Analysis and Classification

Stakeholder analysis and classification is a fundamental business analysis competency that involves identifying, understanding, and categorizing all individuals or groups who have an interest in or are affected by a business initiative, project, or change. This process is critical for ensuring successful project delivery and stakeholder engagement throughout the business analysis lifecycle.

Why Stakeholder Analysis and Classification is Important

1. Risk Mitigation
By identifying all stakeholders early, you can anticipate potential resistance, conflicts, and obstacles. This allows you to develop strategies to address concerns before they become major issues that derail the project.

2. Enhanced Communication
Different stakeholders have different communication preferences, levels of detail requirements, and involvement needs. Understanding and classifying stakeholders enables you to tailor your communication strategy for maximum effectiveness and engagement.

3. Improved Requirements Gathering
Stakeholder analysis helps you identify whose input is critical for requirements elicitation. You can prioritize engaging with stakeholders who have the most valuable information and perspective on the business need.

4. Increased Buy-In and Adoption
When stakeholders feel heard and understand how the solution addresses their needs, they are more likely to support and adopt the change. Classification helps you determine the right level of engagement for each group.

5. Better Resource Allocation
Understanding stakeholder influence and interest helps you allocate effort appropriately. You can focus more intensive engagement activities on key stakeholders and less intensive activities on those with lower influence or interest.

6. Alignment with Business Objectives
Stakeholder analysis ensures that all perspectives are considered in solution design, leading to solutions that better meet organizational objectives and address diverse needs.

What is Stakeholder Analysis and Classification?

Definition
Stakeholder analysis and classification is the systematic process of identifying people or groups with an interest or stake in a proposed change or initiative, determining their characteristics, analyzing their potential impact on the project, and categorizing them based on relevant dimensions.

Key Components
• Identification: Finding all individuals and groups who are or will be affected by the initiative
• Analysis: Understanding their interests, concerns, influence, and expectations
• Classification: Categorizing stakeholders using frameworks to determine engagement strategies
• Strategy Development: Creating approaches to manage relationships and maximize support

How Stakeholder Analysis and Classification Works

Step 1: Identify Stakeholders
Begin by brainstorming and listing all potential stakeholders. Consider:

• Direct users of the solution
• Process owners and managers
• Finance and budget holders
• Technology and IT personnel
• Customers and external parties
• Competitors or adversaries
• Subject matter experts
• Support and maintenance teams
• Executive sponsors and leadership
• Regulatory bodies or compliance officers

Step 2: Gather Stakeholder Information
Research and document relevant information about each stakeholder:

• Role and responsibilities
• Current situation and pain points
• Desired outcomes
• Influence and authority level
• Interest in the initiative
• Concerns or objections
• Communication preferences
• Availability and time constraints

Step 3: Analyze Stakeholder Characteristics
Examine key dimensions that will inform your classification and engagement strategy:

• Power/Influence: How much authority do they have to impact the project?
• Interest/Impact: How much are they affected by or interested in the initiative?
• Position: Are they supporters, neutrals, or opponents?
• Dependency: Do they rely on the outcome or are others dependent on them?
• Expertise: Do they possess critical knowledge or specialized skills?

Step 4: Classify Stakeholders Using Frameworks
Apply classification models to organize stakeholders systematically.

Common Classification Frameworks

Power/Interest Grid (Salience Model)
This is the most commonly used framework in business analysis. It plots stakeholders on two dimensions:

• High Power, High Interest (Manage Closely): These are your key players. They have significant influence and are deeply invested in the project. Engage them regularly, involve them in decision-making, and keep them fully informed. Examples: executive sponsors, senior business leaders.

• High Power, Low Interest (Keep Satisfied): These are key stakeholders. They have authority but limited active involvement. Keep them satisfied by providing periodic updates and monitoring their satisfaction. Examples: upper management, steering committee members.

• Low Power, High Interest (Keep Informed): These are supporters. They care deeply but lack authority to make decisions. Keep them informed and involve them in appropriate ways. Examples: end users, subject matter experts.

• Low Power, Low Interest (Monitor): These are minimal stakeholders. Monitor them for changes in interest or power but don't invest heavily in engagement. Examples: peripheral users, occasional stakeholders.

Salience Model (Three Dimensions)
An extension of the power/interest grid adding legitimacy:

• Power: Ability to influence the initiative
• Legitimacy: Valid claim to be considered a stakeholder
• Urgency: Degree to which stakeholder claims require immediate attention

Stakeholders are classified based on how many of these three attributes they possess, ranging from definitive stakeholders (all three) to latent stakeholders (one attribute).

Other Classification Approaches

• Support/Resistance Matrix: Categorize as champions, supporters, neutrals, resisters, or blockers
• Organizational Structure: By department, level, or functional area
• Demographic Classification: By role type, location, or other characteristics
• Impact Classification: By how directly they are affected (primary, secondary, tertiary)
• Needs-Based Classification: By their primary needs or concerns

Step 5: Develop Engagement Strategies
Based on classification, design tailored engagement approaches:

• Communication plans: Frequency, channels, and message types
• Involvement levels: From passive observation to active decision-making
• Conflict resolution strategies: Addressing opposing interests
• Training and support: Preparing stakeholders for change
• Feedback mechanisms: Ensuring two-way communication

Practical Example

Scenario: Implementing a New Customer Relationship Management (CRM) System

Identified Stakeholders and Classification:

• Chief Executive Officer (CEO) - High Power, Low Interest (Keep Satisfied)
Engagement: Monthly executive summaries, ensure alignment with business strategy

• Sales Director - High Power, High Interest (Manage Closely)
Engagement: Weekly meetings, involve in requirements definition, regular demos

• Sales Representatives - Low Power, High Interest (Keep Informed)
Engagement: Training sessions, feedback surveys, user forums

• IT Manager - High Power, High Interest (Manage Closely)
Engagement: Technical steering committee, system integration planning

• Finance Manager - High Power, Low Interest (Keep Satisfied)
Engagement: Budget reviews, ROI tracking, quarterly updates

• Customers - Low Power, High Interest (Keep Informed)
Engagement: Communication about changes, user support, feedback collection

• Administrative Staff - Low Power, Low Interest (Monitor)
Engagement: Basic awareness communications, support as needed

Best Practices in Stakeholder Analysis and Classification

1. Start Early and Revisit Often
Begin stakeholder analysis during the initial project phases and update it regularly as the project evolves. New stakeholders may emerge or existing stakeholders' roles may change.

2. Be Comprehensive
Don't limit your search to obvious stakeholders. Think broadly about who might be affected, including indirect stakeholders, future users, and those responsible for maintaining the solution.

3. Distinguish Stakeholders from Users
Not all stakeholders are users, and not all users are stakeholders. Users interact with the solution; stakeholders have an interest in or are affected by the initiative.

4. Consider Political Dynamics
Understand organizational politics, alliances, and conflicts that may influence stakeholder behavior and relationships.

5. Involve the Right People in Analysis
Consult with project sponsors, business leads, and process owners to ensure comprehensive stakeholder identification.

6. Document Everything
Maintain a stakeholder register or matrix that documents who they are, their classification, their interests, and their engagement strategy.

7. Manage Conflicting Interests
Acknowledge and address situations where different stakeholders have opposing needs or objectives. Work to find integrated solutions or manage trade-offs transparently.

8. Build Relationships Proactively
Don't wait for problems to engage with stakeholders. Establish relationships early and maintain them throughout the initiative.

How to Answer Exam Questions on Stakeholder Analysis and Classification

Question Type 1: Definition and Concepts
Question Example: "What is the primary purpose of stakeholder analysis in business analysis?"

Approach:
• Define the concept clearly
• Explain its role in the BA process
• Identify key benefits (risk mitigation, communication, requirements gathering)
• Provide a relevant example if applicable

Example Answer: "Stakeholder analysis is the systematic process of identifying, analyzing, and understanding all people or groups affected by or interested in a business initiative. Its primary purpose is to ensure that all perspectives are considered, risks are mitigated, communication is tailored appropriately, and buy-in is secured for successful project delivery."

Question Type 2: Classification Frameworks
Question Example: "A stakeholder has high authority but minimal interest in the project. According to the power/interest grid, how should this stakeholder be managed?"

Approach:
• Identify the classification quadrant
• State the management strategy for that quadrant
• Explain the rationale
• Provide specific engagement tactics

Example Answer: "This stakeholder falls in the 'High Power, Low Interest' quadrant and should be classified as a stakeholder to 'Keep Satisfied.' The engagement strategy should focus on keeping them informed through periodic updates and monitoring their satisfaction level, rather than involving them in detailed project decisions. This approach respects their limited interest while acknowledging their significant influence and ensuring they remain supportive."

Question Type 3: Scenario-Based Problems
Question Example: "You are analyzing stakeholders for a major system implementation. The CEO has delegated project oversight to the CIO but remains ultimately accountable. How would you classify these two executives?"

Approach:
• Carefully consider the described roles and relationships
• Apply the appropriate framework
• Justify your classification with reasoning
• Recommend engagement strategies

Example Answer: "The CEO would be classified as 'High Power, Low Interest' (Keep Satisfied) because while they have ultimate authority and accountability, they have delegated day-to-day involvement. The CIO would be classified as 'High Power, High Interest' (Manage Closely) because they are directly responsible for the project's success. Engagement should include regular executive briefings for the CEO and intensive involvement with the CIO in planning and decision-making."

Question Type 4: Practical Application
Question Example: "What information would you gather about stakeholders to create an effective classification matrix?"

Approach:
• Identify the key dimensions for classification
• List specific stakeholder attributes
• Explain how this information drives engagement strategy
• Mention documentation methods

Example Answer: "To create an effective classification matrix, gather information about: (1) their role and position in the organization, (2) their level of power/authority to influence the project, (3) their interest in or impact from the initiative, (4) their current position (supporter, neutral, resister), (5) their expertise and knowledge areas, (6) their concerns and expectations, and (7) their preferred communication methods. This information enables you to plot stakeholders on the power/interest grid and develop tailored engagement strategies."

Question Type 5: Common Pitfalls
Question Example: "Why is it insufficient to only identify technical users when conducting stakeholder analysis?"

Approach:
• Explain the limitation of narrow identification
• Identify other important stakeholder categories
• Describe risks of omission
• Provide corrective approach

Example Answer: "Limiting stakeholder identification to technical users overlooks important constituencies that can impact project success. You would miss business leaders whose decisions affect prioritization, finance stakeholders who control budgets, operational staff who maintain systems, and executives who set strategic direction. This narrow approach increases risks of insufficient funding, poor requirements definition, operational failures, and lack of executive sponsorship. Instead, use a comprehensive approach considering all affected parties across business, technical, and operational dimensions."

Exam Tips: Answering Questions on Stakeholder Analysis and Classification

Tip 1: Know the Power/Interest Grid Thoroughly
This is the most commonly tested framework. Be able to:

• Name all four quadrants
• Describe the engagement strategy for each
• Identify which quadrant has the highest priority
• Apply it to scenario questions
• Explain when to use alternative frameworks

Tip 2: Understand the Distinction Between Classifications
Be clear about the difference between:

• Stakeholders vs. Users
• Direct vs. Indirect stakeholders
• Internal vs. External stakeholders
• Primary vs. Secondary stakeholders
• Supporters vs. Resisters vs. Neutrals

Tip 3: Connect Analysis to Action
Exam questions often test not just identification and analysis, but also your ability to develop engagement strategies. When answering, move beyond classification to engagement approach:

• Describe communication frequency and methods
• Specify level of involvement in decisions
• Explain conflict management approaches
• Address training or support needs

Tip 4: Recognize Scenario Context
Pay close attention to the specific situation in scenario questions:

• The nature of the change or initiative
• Organizational structure and dynamics
• Stated roles and relationships
• Time constraints or urgency factors
• Known conflicts or sensitivities

Your stakeholder analysis should reflect this specific context, not generic approaches.

Tip 5: Avoid Common Mistakes

Mistake 1: Confusing "Interest" with "Involvement"
A stakeholder with high interest may have low power and vice versa. Interest and power are separate dimensions.

Mistake 2: Assuming All Managers Are "High Power"
While managers typically have authority, their influence on your specific project depends on whether they control relevant decisions, resources, or outcomes.

Mistake 3: Neglecting Negative Stakeholders
Remember that some stakeholders may actively oppose the initiative. They must be identified and managed, not ignored.

Mistake 4: Over-Engaging Low Priority Stakeholders
While all stakeholders deserve respect, don't invest disproportionate effort in those with low power and low interest.

Mistake 5: Treating Stakeholder Analysis as One-Time Activity
Emphasize that stakeholder analysis is ongoing. Classify and re-classify stakeholders as the project evolves.

Tip 6: Use Proper Terminology
When answering, use CBAP-preferred terminology:

• "Stakeholder analysis" not "stakeholder identification" (analysis is the broader process)
• "Power/Interest Grid" or "Salience Model" when referencing frameworks
• "Stakeholder register" or "stakeholder matrix" when referring to documentation
• "Engagement strategy" when describing how to manage relationships
• "Key players," "keep satisfied," "keep informed," "monitor" for quadrant descriptions

Tip 7: Address Both Positive and Negative Dynamics
Complete answers address:

• How to secure support from important stakeholders
• How to identify and manage resistance
• How to resolve conflicts between stakeholders
• How to address concerns and skepticism
• How to maintain momentum despite opposition

Tip 8: Reference Organizational Context
Strong exam answers acknowledge that stakeholder management must be culturally sensitive and organizationally appropriate:

• Consider organizational hierarchy and decision-making style
• Reference communication norms and preferences
• Address organizational politics tactfully
• Acknowledge constraints and practical limitations
• Show respect for all stakeholder perspectives

Tip 9: Prepare for "Why" Questions
Exam questions frequently ask "why" something matters:

Why classify stakeholders?
To ensure appropriate engagement levels and allocate effort efficiently. Different stakeholders require different communication, involvement, and management strategies.

Why identify resisters?
To proactively address concerns, develop mitigation strategies, and prevent opposition from derailing the initiative.

Why document stakeholder analysis?
To maintain a single source of truth, enable team members to understand stakeholder landscape, and track changes over project lifecycle.

Why analyze stakeholder interests?
To understand what matters to them, how the initiative affects them, and what support or resources they need to be successful with the change.

Tip 10: Balance Theoretical Knowledge with Practical Application
While CBAP exams test conceptual understanding, they heavily emphasize practical application. When answering:

• Explain the concept
• Provide a specific example or scenario
• Show how it applies to real business analysis situations
• Demonstrate understanding of consequences and trade-offs
• Suggest practical implementation approaches

Tip 11: Prepare for Multi-Part Questions
Questions may ask you to:

1. Identify stakeholders for a given scenario
2. Classify them using a specified framework
3. Develop engagement strategies for each classification
4. Explain how you would address conflicts
5. Describe how you would document and communicate the analysis

Structure your answer to address each part clearly and completely.

Tip 12: Know When to Use Alternative Frameworks
While the Power/Interest Grid is most common, be prepared to discuss alternatives:

• Salience Model: When legitimacy and urgency are important differentiators
• Support/Resistance Matrix: When understanding positions and building coalition is primary concern
• Organizational Matrix: When understanding structural relationships is important
• Impact-Based Classification: When understanding degree of affectedness is primary

Be ready to explain why one framework might be more appropriate than another for specific situations.

Key Concepts to Master for Exams

Stakeholder Register
A document that records all identified stakeholders, their classification, interests, influence, engagement strategy, and contact information. This is often referenced in exam questions as the primary tool for documenting stakeholder analysis.

Stakeholder Engagement Strategy
The tactical approach for working with each stakeholder or stakeholder group, based on their classification. Strong exam answers specify:

• Communication frequency and channels
• Level and type of involvement
• Specific engagement activities
• Success metrics for the relationship
• Contingency plans if dynamics change

Stakeholder Mapping
The visual representation of stakeholder classifications, typically using the Power/Interest Grid or similar framework. This is often discussed in exam scenarios where you must describe positioning of specific stakeholders.

Change Readiness and Resistance
Stakeholder analysis is closely linked to understanding organizational readiness for change. Exam questions often connect stakeholder analysis to managing resistance and building support for change initiatives.

Sample Exam Questions and Approaches

Sample Question 1:
"During your stakeholder analysis for a new online ordering system, you identify three key groups: warehouse staff (high power, high interest), customers (low power, high interest), and corporate finance (high power, low interest). Which stakeholder group should receive the most intensive engagement?"

Approach: Identify the classification for each group, explain why warehouse staff and corporate finance are both high power, then distinguish between them based on interest level. Warehouse staff's high interest means they care deeply about how the system affects them, making them important partners in design. Corporate finance's low interest means they prefer to be kept informed rather than involved in details. Therefore, warehouse staff should receive most intensive engagement.

Why This Matters: This tests understanding of how the two dimensions (power and interest) drive different engagement strategies.

Sample Question 2:
"A stakeholder who strongly opposes the proposed change works in a department that will be significantly affected and has influence with the executive steering committee. How would you classify this stakeholder, and what is your engagement strategy?"

Approach: Classify as high power, high interest—specifically a "manage closely" stakeholder who is a resister or opponent. Your engagement strategy should include: (1) understanding their specific concerns, (2) finding common ground and areas of agreement, (3) addressing objections with evidence, (4) involving them in solution design to address their concerns, (5) escalating if necessary to executive sponsor, and (6) building alliance with other influential supporters. Emphasize that while you disagree, you respect their perspective and want them on board.

Why This Matters: This tests practical understanding of managing resistance and the importance of engaging powerful resisters rather than ignoring or isolating them.

Sample Question 3:
"What is the primary limitation of only using organizational hierarchy to classify stakeholders?"

Approach: Organizational hierarchy shows authority and reporting relationships but does not reveal actual influence on the specific project, genuine interest level, expertise, or potential for supporting or resisting the initiative. A high-level executive may delegate their authority; a lower-level subject matter expert may have more actual influence on project success. A comprehensive classification considers multiple dimensions beyond hierarchy.

Why This Matters: This tests conceptual understanding of why specific frameworks (like Power/Interest Grid) were developed to address limitations of simpler approaches.

Review Checklist for Exam Preparation

Before taking your CBAP exam, ensure you can:

Knowledge Checks
☐ Define stakeholder analysis and explain why it's important
☐ Describe the Power/Interest Grid with all four quadrants
☐ Explain the engagement strategy for each quadrant
☐ Identify the Salience Model and when to use it
☐ List at least five categories of stakeholders to consider
☐ Explain the difference between stakeholders and users
☐ Describe what goes into a stakeholder register
☐ Explain how to handle conflicting stakeholder interests
☐ Name common pitfalls in stakeholder analysis

Application Checks
☐ Classify given stakeholders using the Power/Interest Grid
☐ Develop engagement strategies based on classification
☐ Apply analysis to scenario-based exam questions
☐ Explain how stakeholder analysis connects to communication planning
☐ Describe how stakeholder analysis supports requirements gathering
☐ Demonstrate understanding of the iterative nature of stakeholder analysis
☐ Relate stakeholder analysis to change management and resistance
☐ Show how to document and communicate stakeholder analysis results

Terminology Checks
☐ Use correct framework names and quadrant labels
☐ Employ CBAP-standard terminology consistently
☐ Distinguish between related concepts (e.g., interest vs. involvement)
☐ Use "stakeholder analysis" correctly vs. related terms

Conclusion

Stakeholder analysis and classification is a foundational business analysis competency that directly impacts project success. Success on CBAP exam questions requires:

1. Conceptual Understanding: Knowing what stakeholder analysis is, why it matters, and what frameworks are available
2. Framework Mastery: Understanding the Power/Interest Grid and other classification approaches
3. Practical Application: Ability to apply frameworks to realistic scenarios and develop actionable engagement strategies
4. Strategic Thinking: Understanding how stakeholder analysis connects to broader BA activities like communication planning and requirements management
5. Professional Communication: Explaining analysis and recommendations clearly and respectfully

By mastering these elements and practicing with scenario-based questions, you will be well-prepared to answer CBAP exam questions on stakeholder analysis and classification with confidence and competence.