Module 09: Identifying Potential Partners

9.4 What are the key steps?

Summary of Actions...
...Hold stakeholder consultation and discussion forum
   ...Set out a framework of objectives
     ...Agree priorities

1. Performing stakeholder analysis

There are several steps to doing a stakeholder analysis:

– Draw up a "stakeholder table";
– Do an assessment of each stakeholder's importance to the project success and his/her/its relative power/influence; and
– Identify risks and assumptions which will affect project design and success.

A. Drawing up a stakeholder table

A stakeholder table could be built following four steps:

a) identify and list all potential stakeholders;

b) identify their interests (overt and hidden) in relation to the problems being addressed by the project and its objectives (note: each stakeholder may have several interests);

c) briefly assess the likely impact of the project on each of these stakeholder interests (positive, negative, or unknown); and

d) indicate the relative priority that the project should give to each stakeholder in meeting his/her/its interests.

a) Identifying the stakeholders and creating a list

Stakeholders can be divided into three categories: primary stakeholders, secondary stakeholders and external stakeholders.

◊ Primary stakeholders are affected directly, either positively or negatively, by the project. In most projects, primary stakeholders will be categorised according to social analysis. Thus, primary stakeholders should be divided by gender, social or income classes, and by occupational or service user groups. In many projects, categories of primary stakeholders may overlap (for example, women and low-income groups).

◊ Secondary stakeholders play some intermediary role and may have an important effect on the project outcome. They can be divided into funding, implementing, monitoring and advocacy organisations, or simply governmental, NGO and private sector organisations. In many projects, it will also be necessary to consider key individuals as specific stakeholders (for example, heads of departments or other agencies, who have a personal interest at stake as well as formal institutional objectives). Also note that there may be some informal groups of people who will act as intermediaries in the project. For example, politicians, local leaders or respected persons with social or religious influence.

◊ External stakeholders are not directly involved, but may nevertheless be affected by a specific project.
In order to ensure the inclusiveness of all stakeholders, management could answer the following questions:

– Have all primary and secondary stakeholders been listed?
– Have all potential supporters and opponents of the project been identified?
– Have primary stakeholders been divided into user/occupational groups, or income groups?
– Have the interests of vulnerable groups (especially the poor) been identified?
– Are there any new primary or secondary stakeholders that are likely to emerge as a result of the project?

b) Identifying interests

The interests of all types of stakeholders may be difficult to define, especially if they are "hidden", or in contradiction with the openly stated aims of the organisations or groups involved. A rule of thumb is to relate each stakeholder either to the problems that the project is seeking to address (if at an early enough stage of the project), or to the established objectives of the project (if the project is already under way). Interests may be drawn out by asking:

– What are that particular stakeholder's expectations of the project?
– What benefits are there likely to be for the stakeholder?
– What resources will the stakeholder wish to commit (or avoid committing) to the project?
– What other interests does the stakeholder have which may conflict with the project?
– How does the stakeholder regard others in the list?

c) Assessing the likely impact of the project

is a qualitative analysis that will identify whether the impact on the stakeholder’s interests is and could be positive, negative or unknown.

d) Setting up priorities,

which the project should give to each stakeholder in meeting his/her/its particular interests.
The results of these four steps should be presented in the form of a table [see Tool 9-2].

B. Assessing the likely impact 

The impact of the project on the shareholders is a function of influence and importance.

Influence is the power that stakeholders have over a project – to control what decisions are made, facilitate their implementation or to exert influence that affects the project negatively. Power may derive from the nature of a stakeholder's organisation, or his/her/its position in relation to other stakeholders.
The importance of particular stakeholders to the project’s success can be identified by answering the following questions:

– The project seeks to address or alleviate which problems; these problems affect which stakeholders?
– For which stakeholders does the project place a priority on meeting their needs, interests and expectations?
– Which stakeholder interests converge most closely with policy and project objectives?

By combining influence and importance using a matrix diagram [click to proceed to Tool 9-3], stakeholders can be classified into different groups. This will help identify assumptions and the risks that need to be managed through project design.

C. Identifying assumptions and risks about stakeholders

The success of a project depends partly on the validity of the assumptions made about its various stakeholders, and the risks facing the project. Some of these risks will derive from conflicting interests.
Planners must identify (and assess the importance of) the most plausible assumptions about each "key" stakeholder which are necessary if the project is to be successful. By assessing the influence and importance of key stakeholders, some risks emerge from the matrix diagram [Tool 9-3].
In order to go systematically through the assumptions and risks which need to be specified for each stakeholder, the following questions should be answered:

– What is the role or response of the key stakeholder that must be assumed if the project is to be successful?
– Are these roles plausible and realistic?
– Are there negative responses that can be expected, given the interests of the stakeholder?
– If such responses occur, what impact would they have on the project?
–How probable are these negative responses, and are they major risks?
– In summary, which plausible assumptions about stakeholders support or threaten the project?

2. Identifying partners’ roles

Each partner can play different roles in a partnership. The most common of these roles are:

◊ Enablers: setting the frameworks for service provision;

◊ Providers: supplying the services;

◊ Users: paying fees to obtain the services; and

◊ Overseers: monitoring and ensuring service quality and price.

Tool 9-4 presents a general overview of the roles that different partners can play in infrastructure services provision.

3. Define relationships and gaps

The stakeholder analysis will show the existing and potential relationships between stakeholders and ultimately will help define the challenge of involving a range of stakeholders in the municipal service strategy. In turn, this will also point towards critical “bridging” organisations and leaders who can help build relationships across traditional sectoral, political, social and economic divides.

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