What is Mendelow’s Matrix? A Comprehensive Guide to Strategic Stakeholder Analysis
Mendelow’s Matrix, also called the Power-Interest matrix, is a framework used to manage stakeholder expectations, and their possible impact on business decisions.
It was created in 1991 by Aubrey L. Mendelow as a straightforward way to handle stakeholders during a project.
Being able to effectively manage stakeholders is paramount to the success of a project. However, this is not always an easy task as different stakeholders will often have conflicting interests.
This can often lead to disagreements, contradictions and tension in a project or business, and must be managed effectively.
To settle any disagreements, the business or project leader would need to decide which stakeholders’ priorities are more important. This is generally be the stakeholder with the most power.
To evaluate the conflicting needs of stakeholders, the Mendelow matrix explores two key factors:
- Stakeholder Power – this is the ability of a stakeholder to influence other stakeholders
- Stakeholder Interest – this is the level of vested interest in the outcome that the stakeholder holds
By mapping each stakeholder according to their level of power, and level of interest, the dominant stakeholders can be easily identified.
What are Stakeholders?
A stakeholder is an individual, or a group, internally or externally, that has an interest in an organisation, and can either affect or be affected by that organisation.
A business will have several stakeholders which can include directors, shareholders, investors, management, employees, customers, finance providers, suppliers, regulators, the government and the community at large.
Stakeholders naturally have different needs and priorities based on their own individual circumstances, and these will often contradict each other and lead to conflict. For example, a customer would like to buy the same product at a cheaper price. However, if this was to happen, the profits of the business would reduce, and this would negatively affect the shareholders and investors in the company.
Therefore, businesses need to strike a balance between the differing needs of all stakeholders involved.
How Does Mendelow’s Matrix Help to Manage Stakeholders?
To use Mendelow’s Matrix effectively, we need to understand its two main components: power and interest.
Power refers to the ability of stakeholders to affect decisions and outcomes within a business.
For example, a government regulatory agency holds substantial power due to its authority to enforce regulations and impose penalties.
Similarly, a CEO of a business holds significant power by being able to influence key decisions.
Interest refers to the level of concern or attention a stakeholder has in relation to the decisions of the business.
For example, local residents would have a high interest in construction projects in the area due to potential environmental or social impacts.
Similarly, customers loyal to a particular brand, would have a lot of interest in the quality and price of the products or services offered.
Mendelow’s Matrix uses a four quadrant grid to visualise stakeholders by plotting their power on the horizontal axis and their interest on the vertical axis.
Key Players | High Interest and High Power | Directors, management, investors or partners |
Keep Satisfied | Low Interest and High Power | Banks, government, insurance companies or regulatory bodies |
Keep Informed | High Interest and Low Power | Employees, suppliers or community groups |
Minimal Effort | Low Interest and Low Power | Local community or general public |
High Interest and High Power – Key Players
Stakeholders in this quadrant will be considered key players and a business will need to actively engage this group as they are likely to have the significant influence.
This is the group that require most focus by keeping them fully engaged throughout each stage of the project.
Low Interest and High Power – Keep Satisfied
This group of stakeholders hold a lot of power but don’t hold a lot of interest. Their influence may be due to their position or authority, but they may not be directly affected by the project’s outcomes
Therefore, these stakeholders should be kept informed and satisfied, to prevent them from using their power to influence and potentially interfere.
High Interest and Low Power – Keep Informed
In this quadrant, stakeholders have a high level of interest, but limited power to influence any decisions.
Consequently, they should be kept informed, and their needs should be addressed. Failure to do so could see them attempt to team up with a group with power in an effort to affect change.
Low Interest and Low Power – Minimal Effort
This group has minimal power and interest in the project or business. They are likely to just accept any decisions and not interfere.
Although their influence may be minor, these stakeholders should still be monitored to make sure their concerns don’t escalate into something more significant.
Advantages of Mendelow’s Matrix
There are several advantages for a business in using Mendelow’s Matrix:
Stakeholder Engagement
The matrix allows a business promote successful stakeholder collaboration strategies.
For example, a renewable energy company could identify local communities as low power, high interest stakeholders.
By actively involving them in project planning, addressing their concerns, and providing benefits such as job opportunities or community development programs, the business can promote positive relationships, gain community support, and reduce opposition.
Risk Management
By considering stakeholder power and interest, the matrix helps to identify potential risks and therefore allows for proactive risk management.
For example, an airline company could identify high power, high interest stakeholders such as safety regulatory associations.
By understanding their concerns and addressing them effectively, the company can mitigate risks, ensure regulatory compliance, and maintain a safe operating environment.
Stakeholder Ranking
Mendelow’s Matrix helps to prioritise stakeholders based on their power and interest levels, which can help businesses to direct their focus and resources appropriately.
For example, a hospital looking to implement a new check in system may use the matrix to identify low power, high interest stakeholders such as patients and healthcare professionals.
By focusing on these stakeholders, the hospital would be able to gain important input on what features and functions the new system should include. This inclusive approach would then enhance the systems usability, and also gain stakeholder buy in and trust.
Strategic Decision-Making
The matrix assists in strategic decision-making by highlighting stakeholders who hold significant power and interest.
A pharmaceutical company, for instance, may identify healthcare professionals as high power, low interest stakeholders.
Although their interest may be low, their influence on prescribing decisions is crucial. The company can tailor marketing and educational efforts to maintain positive relationships and drive product adoption.
Disadvantages of Mendelow’s Matrix
While using Mendelow’s Matrix can be a useful tool in stakeholder management, it does have some disadvantages:
Subjective
Establishing the power and interest levels of stakeholders can be subjective and open to interpretation.
Different individuals within a business may recognise stakeholder power and interest differently, which can lead to inconsistent categorisations.
If stakeholders are categorised into different quadrants by different individuals within the business, it can result in misaligned approaches to engagement and management.
For example, one department could categorise a group of stakeholders as ‘key players’, and keep them actively engaged. On the other hand, another department could categorise the same group of stakeholders as ‘keep satisfied’, and not keep them as engaged.
Overly Simplistic
Mendelow’s Matrix classifies stakeholders into only four quadrants, based solely on power and interest. This can massively oversimplify the complexity of stakeholder relationships, as stakeholders can have a range of motivations, concerns, and levels of influence that may not perfectly fit into any of these categories.
Assumes Static Classifications
The matrix assumes that stakeholders will remain static in their power and interest levels throughout the project.
However, in reality, stakeholder dynamics can change over time, and their power and interest may fluctuate as time passes.
For example, regulatory authorities may have low interest in a business, however, if new regulations are introduced, the regulatory authorities’ interest and power may increase significantly, placing them in the high power, high interest quadrant. As the matrix assumes static power and interest levels, the business may fail to recognise this, leading to inadequate engagement and response to evolving regulatory demands.