strategic planning

RESOURCE A: A Guide to Stakeholder Identification and Analysis Techniques

This resource focuses on how and why leaders, managers, and planners might go about using stakeholder identification and analysis techniques in order to help their organizations meet their mandates, fulfill their missions, and create public value. A range of stakeholder identification and analysis techniques is reviewed. The techniques cover the functions presented in Figure 2.4 : organizing effective participation; creating meritorious ideas for mission, goals, strategies, actions, and other strategic interventions; building a winning coalition around proposal development, review, and adoption; implementing, monitoring, and evaluating strategic interventions; and building capacity for ongoing implementation, learning, and change. Wise use of stakeholder analyses can help frame issues that are solvable in ways that are technically and administratively feasible and politically acceptable, legally and morally defensible, and that create public value and advance the common good.

Figure A.1 shows how the stakeholder identification and analysis techniques fit with the simplified public and nonprofit sector strategic management theory summarized in Figure 2.4 . Note, however, that there is an elaboration of one function in Figure 2.4 —namely, that creating ideas for strategic interventions consists of the two connected subfunctions of formulating problems (identifying issues) and searching for solutions (developing strategies).

Figure A.1. Strategic Management Purposes and Functions and Stakeholder Analysis Techniques to Assist in Fulfilling Them.

An Array of Techniques

Two techniques have already been discussed in detail: Choosing Stakeholder Analysis Participants in Chapter Three and the Basic Stakeholder Analysis Technique in Chapter Four . This resource presents an additional thirteen stakeholder identification and analysis techniques. The techniques are grouped according the functions presented in Figure A.1 . All of the techniques are fairly simple in concept and rely on standard facilitation materials such as flip charts, marking pens, tape, colored stick-on dots, and so on. All it takes to do them is some time and effort—an expenditure of resources that typically is minuscule when compared with the opportunity costs of less-than-adequate performance, or even disaster, that typically follow in the wake of failing to attend to key stakeholders, their interests, and their information (Nutt, 2002 ).

Techniques for Organizing Participation

Stakeholder analyses are undertaken for a purpose and that purpose should be articulated as clearly as it can be before the analyses begin—while also understanding that purposes may change over time. The purpose should guide the choices concerning who should be involved in the analyses and how. Different analyses will be needed at different stages in the Strategy Change Cycle.

Deciding who should be involved, how, when, and why is a key strategic choice in doing stakeholder analyses. In general, people should be involved if they have information that cannot be gained otherwise, or if their participation is necessary to assure successful adoption and implementation of initiatives built on the analyses (Thomas, 1993 , 1995 ). There is always a question of whether there can be too much or too little participation. The general answer to this question is, yes, of course. But the specific answer depends on the situation, and there are no hard-and-fast rules, let alone good empirical evidence, on when, where, how, and why to draw the line. There very well may be important trade-offs between early and later participation in analyses and one or more of the following: representation, accountability, analysis quality, analysis credibility, analysis legitimacy, the ability to act based on the analyses, or other factors, and these will need to be thought through. Fortunately, “the choice” actually can be approached as a sequence of choices, in which first an individual or small planning group begins the effort, and then others are added later as the advisability of doing so becomes apparent (Finn, 1996 ).

Five stakeholder identification and analysis techniques are particularly relevant to helping organize participation: a process for choosing stakeholder analysis participants (discussed in Chapter Three ); the basic stakeholder analysis technique (discussed in Chapter Four ); power versus interest grids; stakeholder influence diagrams; and the participation planning matrix.

Power Versus Interest Grids.

The power versus interest grid is described in detail by Eden and Ackermann ( 1998 , pp. 121–125, 344–346) (see Figure A.2 ). This grid arrays stakeholders on a two-by-two matrix where the dimensions are the stakeholder's interest (in a political sense as opposed to simple inquisitiveness; see Campbell & Marshall, 2002 ) in the organization or issue at hand, and the stakeholder's power to affect the future of the organization or issue. Four categories of stakeholders result: players who have both an interest and significant power; subjects who have an interest but little power; context setters who have power but little direct interest; and the crowd, which consists of stakeholders with little interest or power.

Figure A.2. Power Versus Interest Grid.

Source: Eden & Ackermann, 1998 , p. 122. From Making Strategy: The Journey of Strategic Management, by C. Eden and F. Ackerman. Copyright © 1998 by Sage Publications, Inc. Reproduced with permission of Sage Publications via Copyright Clearance Center.

The power versus interest grid helps determine the players, the people whose interests and power bases must be taken into account in order to address the problem or issue at hand. It also highlights coalitions to be encouraged or discouraged, behavior that should be fostered, and people whose buy-in should be sought or who should be co-opted. Finally, it provides some information on how to convince stakeholders to change their views. Interestingly, the knowledge gained from this grid can be used to help advance the interests of the relatively powerless (Bryson, Cunningham, & Lokkesmoe, 2002 ). Note that in some cases it may make sense to construct a power versus identity grid, for identity as well as interest can motivate stakeholder action; see Rowley & Moldoveanu, 2003 .

A power versus interest grid is constructed as follows:

· •The facilitator tapes four flip chart sheets to a wall to form a single surface two sheets high and two sheets wide.

· •The facilitator draws the two axes on the surface using a marking pen. The vertical axis is labeled interest from low to high; the horizontal axis is labeled power from low to high.

· •Planning team members brainstorm the names of stakeholders by writing the names of different stakeholders as they come to mind on a 1½ × 2-inch (2½ × 5-cm) self-adhesive label, one stakeholder per label. Alternatively, if the Basic Analysis Technique has been performed, the names should be taken from that list.

· •The facilitator places each label in the appropriate place on the grid, guided by the deliberations and judgments of the planning group members. Labels should be collected in round-robin fashion, one label per group member, until all labels (other than duplicates) are placed on the grid or eliminated for some reason.

· •Labels are moved around until all group members are satisfied with the relative location of each stakeholder on the grid.

· •The group should discuss the implications of the resulting stakeholder placements.

· •The facilitator records the results of the discussion on flip chart sheets.

Stakeholder Influence Diagrams.

The stakeholder influence diagram indicates how the stakeholders on a power versus interest grid influence one another. The technique is taken from Eden and Ackermann ( 1998 , pp. 349–350; see also Bryson, Cunningham, & Lokkesmoe, 2002 ) and begins with a power versus interest grid. The steps in developing such a diagram are as follows:

· •The planning team should start with a power versus interest grid and then, for each stakeholder on the grid, suggest lines of influence from one stakeholder to another.

· •The facilitator draws in the lines with a soft-lead pencil. Two-way influences are possible, but an attempt should be made to identify the primary direction in which influence flows between stakeholders.

· •Team members engage in a dialogue to determine which influence relationships exist, which are most important, and what is the primary direction of influence.

· •Once final agreement is reached, the pencil lines should be made permanent with a marking pen.

· •Team members discuss the results and implications of the resulting diagram, including identifying who are the most influential or central stakeholders.

Participation Planning Matrix.

In a sense, all the techniques considered thus far are relevant to planning for stakeholder participation. The participation planning matrix, however, is specifically designed for this purpose. The matrix adapts contributions from the International Association for Public Participation ( 2007 ), specifically the association's notion of a spectrum of levels of public participation and the strategic management functions identified in Figures 2.1 and A.1 . The levels of participation range from a minimum of ignoring stakeholders through to empowerment, giving stakeholders or some subset of them final decision-making authority. Each level has a different objective and makes a different kind of promise—implicitly if not explicitly (see Exhibit A.1 ).

The matrix prompts planners to think about responding to or engaging different stakeholders in different ways over the course of a strategy change effort. As a result, planners may reap the benefits that arise from taking stakeholders seriously yet avoid the perils of responding to or engaging stakeholders in inappropriately. The process for filling out the matrix is as follows:

· •Begin using this matrix relatively early in any change effort, but not before some prior stakeholder analysis work has been done

· •Place stakeholders’ names in the appropriate boxes and then develop action plans for how to follow through with each stakeholder

· •Revise the matrix as the change effort unfolds

Techniques for Creating Ideas for Strategic Actions

Creating ideas for strategic interventions involves strategic issue identification and strategy development, but also depends on understanding political feasibility. In other words, creating ideas that are worth implementing and also implementable depends on clearly understanding stakeholders and their interests, both separately and in relation to each other, so that issues can be formulated in such a way that they have a chance of being addressed effectively in practice (Wildavsky, 1979 ). Therefore, the techniques relevant to organizing participation also have something to contribute to the process of issue identification and strategy development. In turn, issue identification in conjunction with strategy development can have an impact on organizing participation. Six additional techniques are particularly relevant to creating ideas for strategic interventions. They are the bases of power and directions of interest diagram; the technique of finding the common good and the structure of a winning argument; the technique of tapping individual stakeholder interests to pursue the common good; stakeholder-issue interrelationship diagrams; the problem-frame stakeholder maps; and ethical analysis grids.

Bases of Power–Directions of Interest Diagrams.

This technique, building on the power versus interest grid and a stakeholder influence diagram, involves looking more closely at each of the stakeholder groups, including the most influential or central stakeholders. A bases of power–directions of interest diagram can be created for each stakeholder. The technique is an adaptation of Eden and Ackermann's “star diagrams” ( 1998 , pp. 126–128, 346–349; see also Bryson, Cunningham, & Lokkesmoe, 2002 ). A diagram of this kind indicates the sources of power available to the stakeholder, as well as the goals or interests the stakeholder seeks to achieve or serve (see Figure A.3 ). Power can come from access to or control over various support mechanisms, such as money and votes, or from access to or control over various sanctions, such as regulatory authority or votes of no confidence (Eden & Ackermann, 1998 , pp. 126–127). Directions of interest indicate the aspirations or concerns of the stakeholder. Typically the diagrams focus on the stakeholder's bases of power and directions of interest in relation to a focal organization's purposes or goals; that is, they seek to identify the powers that might affect achievement of the focal organization's purposes.

There are three reasons for constructing the diagrams for each stakeholder, or at least for all key stakeholders. The first is to help the planning team find the common ground—especially in terms of interest—across all of the stakeholder groups. After exploring the power bases and interests of each stakeholder, the planning group will be in a position to identify commonalities across the stakeholders as a whole, or across particular subgroups. Second, this search will allow the group to find the common good and the structure of a winning argument (see the next technique). Third, the diagrams are intended to provide background information on each stakeholder in order to know how to tap into stakeholders’ interests or make use of their power to advance the focal organization's agenda as well as the common good. For example, background information can be used in stakeholder role plays (discussed later in this resource) to help planners further understand stakeholder reactions to specific problem frames or proposals for change.

A bases of power–directions of interest diagram may be constructed as follows:

· •The facilitator attaches a flip chart to a wall and writes the stakeholder's name in the middle of the sheet.

· Exhibit A.1. Participation Planning Matrix.

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· Source: Adapted from International Association for Public Participation, 2007 , and Bryson, 2010 , p. S256. See also Figure 1.4 .

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· Figure A.3. Bases of Power–Directions of Interest Diagram, with Examples of Power Bases and Interests.

· Source: Adapted from Eden & Ackermann, 1998 , p. 127, and Bryson, Lokkesmoe, & Cunningham, 2002 .

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· •The planning team then brainstorms possible bases of power for the stakeholder (particularly as they affect the focal organization's purposes or interests) and the facilitator writes these on the bottom half of the sheet.

· •Following team discussion, the facilitator draws arrows on the diagram from the power base to the stakeholder, and between power bases to indicate how one power base is linked to another.

· •The planning team then brainstorms goals or interests they believe the stakeholder has (particularly those relevant to the focal organization's purposes or interests). The facilitator writes these on the top half of the sheet and draws arrows from the stakeholder to the goals or interests and, when appropriate, arrows linking goals or interests.

· •A thorough discussion of each diagram and its implications should occur.

· •The facilitator records the results of the discussion on flip chart sheets.

Finding the Common Good and the Structure of a Winning Argument.

Bryson, Cunningham, and Lokkesmoe ( 2002 ) created this technique and used it successfully to help develop a viable political strategy for producing better outcomes for young African American men in a large county in the United States. The technique builds on the bases of power–directions of interest technique; such diagrams can be explored in depth to determine which interests or themes appear to garner support from a significant number of stakeholders. Members of the planning team will need to search for these common themes, which are called super-interests. For each theme, the team should construct a label that appears to capture or integrate the specific interests that make up the theme. The identification of common themes is a subjective exercise calling for creativity, discernment, and judgment. After identifying these themes, the team should then construct a map that identifies all of the super-interests that tie together the individual stakeholders’ interests and that indicates what appear to be the relationships among the super-interests.

The map is called finding the common good and the structure of a winning argument because it indicates—at least in part—what the common good (or the creation of real public value) is for this group of stakeholders and suggests how arguments probably will need to be structured to tap into the interests of enough stakeholders to create a winning coalition. In other words, if persuasive arguments can be created that show how support for specific policies and programs will further the interests of a significant number of important stakeholders, then it should be possible to forge the coalition needed to adopt and implement the policies and programs. Being relatively clear about goals or interests—though not always necessary (Crosby & Bryson, 2005 ; Huxham & Vangen, 2005 ; Innes & Booher, 2010 )—does help when it comes to producing successful programs and projects (Nutt, 2002 ). Any difficulties that then arise are likely to concern the means to achieve specific ends rather than the ends themselves. Conflicts over means can be resolved through interest-based bargaining and through the creation of prototypes, pilot projects, or small experiments to identify the most effective approaches (Nutt, 1992 ). In addition, the structure of a winning argument outlines a viable political rhetoric around