Introduction: A Tale of Two Projects
Imagine two projects of similar scope and complexity: one started without a clear method for handling stakeholder changes, and the other initiated based on an upfront stakeholders’ analysis.
Both projects started off in a similar way. We understood that the first project involved implementation of a financial system mandated by the chief executive, but without sufficient stakeholder support. We had difficulty with limited stakeholder involvement throughout this project. As the project progressed, this made the management of budget, schedule, and quality increasingly problematic. There was no established way to deal with changes in personnel, changes in attitude, and changes in application scope. In addition, there was no clear picture of whose needs were being met, and where they stood in terms of their support for the project in the first place. What started out as perhaps “the best of times,” or a quick start-up with a project team ready to dive in and get the job done, became all too soon “the worst of times,” with missed deadlines, unclear specifications, a fractured chain of command, and increased negativity towards the project altogether.
The second project involved preparing a project charter for an Electronic Medical Records (EMR) system. Our client requested that we establish a common understanding of the project objectives, assumptions, scope, approach, management organization, responsibilities, and risks. We learned an important lesson after completing the first project: Start the project by identifying key stakeholders and their expected level of involvement in the project. As a result, we recommended that the second project begin with a stakeholders’ analysis to obtain information necessary for managing and proceeding with the project successfully.
Lessons Learned
The first project struggled to avoid cancellation and failure; while the second moved smoothly towards successful completion. We needed to know: What was the key difference between them, and what were the lessons learned during the first project applied to the second that made that difference?
- Stakeholder involvement is essential.
- Identification of primary stakeholder involvement at project initiation is a key determinant of project readiness and success.
- Stakeholder analysis provides information on how to manage stakeholders and proceed successfully.
- Knowledge of a project’s participants gained from the stakeholders’ analysis helps address implications if stakeholders change.
Definitions
So, who are these “stakeholders” and what do we mean by a “stakeholders’ analysis”?
Stakeholders are persons or groups whose problems, needs or interests are affected by the project. In other words, stakeholders are those individuals with a “stake” in the successful outcome of the project. There are Primary Stakeholders, who are directly affected by a project, and Secondary Stakeholders, who are indirectly affected by the project. For example, a nurse is a primary stakeholder because they are direct system users, while a billing clerk, who receives changes from nursing regardless of whether an EMR is implemented, is a secondary stakeholder.
A Stakeholders’ Analysis is an assessment of a project’s key participants and the extent to which their problems, needs, and interests are affected by the project. It represents the first step in building relationships by identifying:
- Capabilities of an organization to attain project success, i.e., project readiness
- Characteristics and interests of stakeholders
- Conflicts of interests among stakeholders
- Roles of stakeholders, e.g., issue resolution, periodic committee participation, full-time committee assignment, etc.
- Capacity of stakeholders to participate in the project
- Participation by different project phase, i.e., system planning, definition, acquisition and implementation
The Stakeholders’ Analysis identifies this information by measuring the following four key factors:
Importance
How important is the project to its stakeholders? Has its success been given priority at the appropriate levels (i.e., department, division, organization, operations, etc.)? Importance measures what impact the project has on those who are affected by it – if it succeeds, if it fails, if it doesn’t happen.
Influence
Who has the power to affect whether the project succeeds or fails? Is that power or authority formalized, in the sense of reporting relationships and organizational hierarchy, or is it informal and based on the subtleties of personal relationships, unwritten agreements and “behind-the-scenes” brokering? Who approves the project budget? Who can assign personnel to project tasks? Influence measures the level of control that can and will be asserted by participating individuals on the project, and identifies whether the people who are involved with the project have not only sufficient responsibility, but the associated authority to accomplish project objectives.
Engagement
Which stakeholders are “in the loop” and which are less active “observers”? When a potential problem or issue arises, who is current enough on the project status that they are able to make informed, intelligent decisions to resolve conflicts and “steer” the project so it stays on course? Who not only wants to receive status reports and other project correspondence, but desires an active role in anticipating problems and long-term risk management? Engagement measures individual participants’ willingness to stay informed and be current on project issues and the implications of their resolution. Using the metaphor of a set of gears, engagement ensures that the participants are “in gear” and work together to move a project forward, rather than being out of sync or in neutral, which jeopardizes positive momentum.
Commitment
Who has the time to commit themselves, or resources under their supervision, to the actual planning and execution of project tasks? Which stakeholders can be counted on to consistently attend project team and/or Steering Committee meetings? Which individuals can promise that the expertise or resources needed at a given time during the project will be there? Commitment measures the degree to which an individual will be available, either through direct participation or through the assignment of staff, to participate in the project throughout its lifecycle. It represents the “proof in the pudding” of importance, and the action required for “engagement.”
The Analysis Process
This section describes the process we followed to conduct the second project’s stakeholders’ analysis.
Step 1 – Identify Business Areas Affected by the Project
In order to make sure that the entire gamut of potential stakeholders are considered, representatives from affected business areas should be included in the analysis. For the EMR system in question, these business areas included:
- Clinical
- Legal
- Financial
- Information Technology
- Corporate
- Other
Step 2 – Identify Primary Individuals Representing Affected Business Areas
For the affected business areas defined in Step 1, it is important to identify key individuals responsible for dealing with the proposed project. These individuals should be senior enough to have an understanding of the project’s potential impact on their business area. Examples of individuals included in our analysis were the Chief Medical Officer, Chief Information Officer (CIO), Chief Nursing Officer, Chief Financial Officer, etc.
Step 3 – Identify a Stakeholders’ Analysis Tool
Some method for collecting responses from stakeholders, accumulating and aggregating these responses and reporting the outcome needs to be selected. We accomplished this using an online survey tool that required individuals to access a URL and enter their responses using a web browser. As an alternative (or supplementary) method, we suggest conducting interviews with the individuals identified in Step 2 and the results tabulated in a word processing or spreadsheet document.
Step 4 – Identify Analysis Questions
Whatever the instrument you use to collect information on stakeholders, you need to make sure you ask questions that get you meaningful responses. These questions should focus on stakeholder requirements – how their needs are affected. The number of questions can vary, but they should fall into the following categories:
- Consequences – What is the impact of a positive or negative project outcome? How does it affect the individual, their department or division, the entire organization? Are there personal repercussions if the project succeeds or fails?
- Budget – What financial resources are available for the project? Who controls those funds?
- Schedule – Identify an estimated timeframe for the project, so that individuals responding have a clear understanding of the time commitment that is required of them. Can stakeholders commit to the identified timetable? Are there other activities that conflict with this timeframe? Does the identified schedule coincide with the availability of personnel and resources?
- Scope – Is there a common understanding or appreciation of what the proposed project is supposed to accomplish? What business functions or areas will it improve? What existing problems or issues will it resolve or mitigate? Provide respondents with an opportunity to rank what they think is important to them, to their respective department or section, and to the overall organization. Are these rankings consistent?
- Resources – In order to provide a clear understanding of the resources required to complete the project, provide questions that identify project roles and responsibilities and determine who will fill those roles. Will personnel be assigned to conduct project planning? Analysis and design? Review of proposed solutions? Implementation (i.e., review, testing, go-live, conversion, data migration, etc.)?
Step 5 – Analyze Survey Results
Once stakeholder responses have been collected, it’s time to figure out what they mean. You’ll want to look at importance, influence, engagement and commitment both by individual stakeholder and by stakeholder business area. Which stakeholders are both influential enough to control the project’s fate and willing to wield that influence on the project’s behalf? What organizational units are most likely to be affected by the project’s success? Is their level of commitment commensurate with that potential impact? Who are likely candidates for a project Steering Committee?
A Case Study
In the second project, our client had a previous EMR project failure primarily because the former Chief Information Officer (CIO) selected and attempted to implement a system without sufficient stakeholder support. The new CIO wanted to prepare a project charter to assess whether there was sufficient support for a new EMR project. We met with the executive sponsor and CIO and recommended that our client first prepare a stakeholders’ analysis to determine whether there was sufficient support before proceeding with a project charter.
The Method of Analysis Used
We used a report writer to analyze the survey results, and summarized these results in a memorandum to our client. These results included the following:
Importance
Exhibit 1, below, provides an overview of the support indicated by responses in the category of importance.
Exhibit 1
Project Importance by Stakeholder Entity
These results illustrated that the overall level of support for the project, in terms of its importance to individual stakeholders and the organization as a whole, was relatively high, with the highest support indicated by the Project Steering Committee at 93%. This positive response suggested that the Project Steering Committee contained the appropriate individuals to provide required support for the project, in terms of importance. It also indicated that the other committees, while they considered the project of lesser importance, maintained that the project and its successful completion were important.
Influence
Exhibit 2, below, provides an overview of the support indicated by responses in the category of influence.
Exhibit 2
Project Influence by Stakeholder Entity
Overall support for influence was relatively low at 45%, and no single individual member of these committees had complete authority over all project budget, schedule, scope, and personnel resources. Most committee members indicated that they had the “informal” status to affect decision-making, but were not personally the decision-makers, at least on their own. This made sense. The project governance was anticipated to be “by consensus” among the Project Steering Committee membership with direct involvement of higher levels of authority (e.g., IT Steering Committee and Executive Committee), as required.
Engagement
Exhibit 3, below, provides an overview of the support indicated by responses in the category of engagement.
Exhibit 3
Project Engagement by Stakeholder Entity
Overall, the level of engagement indicated by survey responses was relatively high. The IT Steering Committee and Executive Committee levels were somewhat lower than those for the Project Steering Committee. However, this appeared to be because their roles required overseeing rather than directing or “steering” the project. Those individuals on the Executive Committee who responded with positive influence levels also indicated a willingness to keep apprised of project developments and actively participate in the project. Depending on the project role played by each entity, there appeared to be sufficient engagement at the organization to successfully keep the project “in gear.”
Commitment
Exhibit 4, below, provides an overview of the support in the category of commitment.
Exhibit 4
Project Commitment by Stakeholder Entity
The commitment responses were lower than the responses for all other categories. Stakeholders believed the project is important and that they wanted to positively influence and be engaged in it. In many cases, it appeared that while stakeholders agreed on the project’s importance, and were interested in its progress, many felt they would not have the time to participate, beyond the initial planning phase. However, these same individuals underscored a strong desire to commit to this project, as indicated by a number of positive comments provided at the end of the survey. They also indicated that they would participate in ongoing project activities, particularly after the planning phase, if there were a change in priorities. Alternatively, some respondents offered to assign subordinates to keep their superiors apprised of project issues.
The Conclusions or Outcomes Achieved
The results of the stakeholders’ analysis, conducted during the EMR project, allowed us to determine:
(1) Key project stakeholders supported the EMR project.
(2) No single individual had complete authority over the EMR project budget, schedule, scope and personnel resources. Most individuals indicated that they had the “informal” status to affect decisionmaking. Stakeholders indicated that they anticipated EMR project governance would be by consensus.
(3) Key stakeholder engagement in the EMR project would be relatively high.
(4) Commitment to the EMR project was low because of other priorities, not due to a lack of interest.
Unfortunately, this information was not readily available in the first project because we did not conduct a similar stakeholders’ analysis.
Our Recommendation
We recommended that our client prepare an EMR Project Charter, based on the results of a stakeholders’ analysis. Our client proceeded with the project charter, established the EMR project as a priority and committed to making resources available to complete the project successfully.