The Disruptive Innovator

Discussions concerning Innovation Strategy, how to design and market innovative new high technology products and services, the difference between technologies and products, Disruptive Innovations,the Technology Adoption LifeCycle, the SWIFT New Product Innovation method, Silicon Valley startups and more.

Thursday, August 24, 2006

What is a Stakeholder Chart, and How Do We Use It?

What is a Stakeholder Chart, and How Do We Use It?

In our last post on Innovation Theory we discussed Who Are Stakeholders? Today we will begin to apply these definitions in determining the necessary characteristics of the new innovation we will be designing.

In the course of that post we defined several roles that Stakeholders may play. In particular, we defined the following roles:

  • User
  • Buyer
  • Evaluator
  • Ally / Blocker
  • Sponsor

In the case of many inexpensive consumer products, there is only one decision-maker that has to be convinced to purchase the product. The purchaser is in charge of the finances needed to make the purchase, is knowledgeable about what they need the product to do, and will ultimately will be the user of the product as well.

Knowing who all the stakeholders in a purchase/usage situation are is important for us to know before we begin designing our innovation, because stakeholder relationships have a huge impact on what product and service characteristics will be adopted quickly, which may be adopted slowly and which most likely will never be adopted at all. We’ll see an example of that later, but right now let’s work through a simpler example that I call Anita’s New Car.

Anita’s New Car

The following example illustrates these roles. The accompanying Stakeholder diagram is often useful for capturing the roles and lines of influence between individuals:

Anita's New Car Stakeholder Influence Diagram

This diagram captures the stakeholder relationships in the case of “Anita’s New Car”. Anita is just about to turn 16 and, as is common in her upwardly mobile suburban neighborhood, she wants a car for her birthday. Anita Carr is the “User”, because if a new car is purchased, she will be the one to operate it. But in a major purchase, the situation is often different. Consider the case of Anita, a girl who wants a car for her 16th birthday. If a car is purchased, she will be its “User”. So the car’s features have to please her and be usable by her. For instance, because Anita’s driver’s education class didn’t teach students to drive a manual transmission, Anita is only considering cars that have an automatic transmission. It also needs to be stylish enough that she is proud to show it off to her friends.

Anita really prefers cars that she feels are “sporty” or “cute”. Anita likes Lexus SC300, the Jaguar XJ-7, the VW Beetle, the Chevy Corvette, the Suzuki Samurai, the Honda del Sol and the Toyota Cressida.

However, Anita is not the only stakeholder who will determine whether a car is purchased for her, or even which car is purchased. Anita is not financing the car herself; she needs her family to make the payments.

In Anita’s home, it is Anita’s mother, Iona Carr, who is responsible for keeping the checkbook and budget. Ultimately, Iona has veto power over any proposal if she feels the amount of money that will be spent on the car is excessive. Naturally, she is looking for a frugal investment. Iona plays the role of “Buyer” in the purchase decision.

Iona decides the Lexus and the Jaguar are out of their budget.

Anita’s Dad, Denton Carr, is also involved in the decision. Denton knows a lot about what makes a car safe and reliable. He plays the role of the “Evaluator” or “Technical Buyer”. Denton is concerned with which cars are reliable, safe and efficient.

While Iona may set the overall budget for selecting cars, there may be cars that are within the budget but which don’t meet his safety and reliability requirements and so he may veto these cars. Similarly, Denton might recommend a car because of its safety and reliability track record, but Iona may veto that purchase if it is too expensive. The final choice must pass both sets of hurdles.

Denton checks the cars in Consumer Reports and finds the Corvette has a high rate of repair, and that the Suzuki turned over in their obstacle avoidance test. So he removes those from the selection list, leaving only the VW Beetle, the Honda del Sol and the Cressida for Anita to choose from.

Anita’s Grandmother, Shirley Rich, lives on the east coast, while Anita and her family live on the west coast. Shirley doesn’t travel much any more, but she pays for Anita to fly out to see her for two weeks every summer. Shirley dotes on Anita, her only grand-daughter, and she wants Anita to be happy.

Last month, Anita told Shirley that she really wanted a car for her birthday, but she didn’t think Mom was going to approve it. She asked Shirley to talk to Iona to try to change her mind.

While Shirley doesn’t particularly care which model Anita gets, and while Shirley will probably never ride in Anita’s car, she does want Anita to get the car she wants. So she went to bat and lobbied Iona to get Anita the car she wants.

In this scenario, we can see that Anita’s Grandmother plays the role of a “Sponsor”. Her influence on Anita’s mother may be critical for this purchase to be made.

It should now start to become clear that there are multiple stakeholders whose needs must be met for a purchase to be completed. But there are even more stakeholders we must be concerned with.

Anita’s 14 year old younger brother, Noah Carr, also plays a role in the decision making. He plays an Ally or Blocker role. In this case, Noah supports Anita getting a car, because he believes that if Anita has a car she can take him to the mall with her after school, so he doesn’t have to be dependent upon Mom to drive him. Not only is depending on his mother inconvenient, it conflicts with his social image goals. As he tells his mother: “It is Sooo Uncool be driven to the mall in a ratty old station wagon, Mom!”

He’s been helping feed information about the purchase decisions to Grandma Shirley to get her help in arguing the case for a car for Anita with his parents.

Noah hopes that Anita will get a car that will be cool and impress his friends when he arrives, like the new VW beetle he showed to Anita. Noah is an Ally, because he will benefit from Anita acquiring a car and driving him places, and he will benefit more if the car is “cool” and less if it is “an old heap”.

Anita’s high school friends Norma Walken, Ivana Driver, and Vera Wright all like to hang out together after school. While all have their driver’s licenses, no one has a car of their own. Sometimes they are able to borrow one from their parents, but that situation isn’t reliable and all too frequently they have to walk. Norma, Ivana and Vera want Anita to get a car that will fit all four of them comfortably plus all there gear when they head for the beach. And they hope that she will let them drive it on occasion as well. Norma, Ivana and Vera are also Allies. They stand to benefit from Anita getting a car, especially if it is large enough for all four of them and their gear. While they think the Beetle is really cute, they are hoping she will get something larger like the Suzuki Samurai or Toyota Cressida that could carry a lot of stuff to the beach. They are also discouraging her from considering the two-seater sports cars like the Corvette and the Honda Del Sol.

Anita’s boyfriend, Axel Bender is also an Ally, though his interests are very different from those of Norma, Ivana and Vera. Quite frankly Axel would like Anita to spend less time with her girl friends and more time alone with him. He also would like Anita to get a sporty car, that he can drive some times, because he hasn’t had a car of his own since he wrapped his last one around a light pole while drag racing. To achieve his personal goals Axel is urging Anita to get a two-seater sports car like the Honda Del Sol or the Corvette so that he can drive it some times, and in which he knows that they will be alone together and not carrying her brother or her friends. Plus the tops on the Del Sol and Corvette are removable so that the car becomes a convertible – even better for his friends to have a clear view of him driving this cool new car.

This kind of competition for conflicting feature sets by different Allies is common and why one person’s ally is another person’s blocker.

Rusty Lemon is the salesman at the local VW dealership. He also plays the role of an ally. He wants Anita to get a car she is happy with, but he strongly prefers that it be a VW since that’s how he will get a commission. Moreover, there is a special incentive to the sales rep who sells the most New Beetles to first time buyers this month, so he is pushing that particular model, and hoping to close in the next week. This makes Rusty an Ally as well.

Ultimately Anita picks the VW Beetle because it comes in purple, her favorite color, and because Rusty made her feel really good about the choice, using Noah’s and Norma’s recommendations as part of the sales pitch.

But the purchase could not have been made without everyone else’s involvement. While not everyone got their first choice, everyone could be satisfied with the eventual purchase. If the goal of a product design is to specify a product that will be profitable, the design needs to reflect the requirements of the multiple people involved in the purchase.

This sort of multi stakeholder involvement is more common than uncommon in expensive purchase and most Commercial sales. A good SWIFT design recognizes all these sorts of roles and makes sure that each one is addressed, since any one stakeholder that is not minimally satisfied and represented in the plan may cause the sale of the product to come to a halt or fail.

In the foregoing stakeholder analysis, Anita and her constellation of other influencers are not real people but are Archetypal stakeholders that represent a typical stakeholder in a given role. We don’t want our design to be so specific to the idiosyncrasies of a single real prospect that our product won’t work for others. However, we also want to avoid what Alan Cooper calls the “plastic user syndrome” – where we justify bad design choices by constantly changing the characteristics of our users so that we actually design something that is too general or complicated for actual users. By using Archetypal stakeholders we make sure that we actually design something that will be usable by real people.

We give our Archetypal characters names, such as Anita Carr, so that we can better imagine their goals, needs and reactions, and so that we can discuss these characteristics with other designers. I prefer to give these characters amusing but memorable names so that I can remember what role they play by their names.

How to use Stakeholder Analysis to Solve Design Problems

Now let’s apply this stakeholder model to another real world problem. In 1998 I had the opportunity to apply SWIFT methods to design the PlaceWare Web Conferencing System (now Microsoft Live Meeting).

One goal for our design was to serve the needs of sales and marketing people who want to deliver an effective multimedia presentation to a potential customer, without the need for either party to travel to a common location for a face to face meeting.

One of the first things we note that is unusual about this goal is that there is not one Archetypal user, but at least two that we must satisfy: the presenter, and the attendee.

If we did not do a full stakeholder analysis, we might be tempted to create a design that was very powerful and attractive to presenters, but which might be too complicated for attendees.

Or we might design a product that was simple and fast for attendees, but not powerful enough to meet the presenter’s needs.

Failure to take care to address both stakeholders’ needs has doomed many “groupware”, “collaboration” and “communication” products.

But there is another application of Stakeholder analysis that can help inform our designs.

Consider the problem we faced with the PlaceWare Web Conferencing Center. Once we had software that could address the needs of both attendees and presenters, we faced a choice about how we would sell it and deploy our server.

For instance, we could:

1. Sell our server software to be installed on the customer’s own computers,

2. Sell a custom hardware appliance that was preloaded with our software

3. Operate our own servers and provide a web based service.

While our design might serve presenters and attendees equally, Choices 1 and 2 require the involvement of a new stakeholder: someone in the IT department. Because these solutions work on the customer’s own equipment, this person will be concerned about the load that such software puts on the local servers and networks. This means that such a system would actually complicate the life of such a person. On the other hand because choice 3 does not run on any computers within the customer company, this IT stakeholder is not present in the choice 3 stakeholder’s analysis.

By doing the stakeholder analysis, we could see that the sales cycle of Choice 3 would be considerably faster and adoption higher than in choices 1 and 2. And with that insight the choice to field our software as a web based service became clear.


We’ve seen how to create a stakeholder influence diagram and use it to identify all the people who must be satisfied to sell our product, and how this can affect how we choose to field our product and other characteristics.

In coming posts we will look at how to further analyze our stakeholders in terms of other buying characteristics, known as their Technology Adoption LifeCycle (TALC type).


Post a Comment

<< Home