How to make Risk & Issue Management Work? PART 1

Posted by Kevin Brady on Fri 1st December 2006 at 11:20 PM, Filed in Project ManagementRisk & Issue ManagementKey Articles

This is a question, which I have rarely seen properly answered in any PRINCE II manual.

As with many things in life, the theory and the practical application of a concept are often two distinct sides of the same coin, which can lead to some serious difficulties. Over the years, I have audited many projects /programmes of work and most, if not all, of those which were subsequently discovered to be failures were characterised by poor /non-existent risk & issue management.

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More often than not the project /programme managers responsible for these process failures, when challenged, refuse to accept that they had been running a project /programme of work with little, if any, risk and issue management present.

Their typically expressed view is that a list of unchanged risks /issues compiled at a project /programmes inception (by the management without staff involvement) and never followed-up, is their idea of what constitutes risk and issue management.

If you are a Project /Programme manager who concurs with this view then read on, and I will take you on journey of enlightenment which may help to increase your projects /programmes probability of success, protect you from personal criticism, and help motivate your project team.

Correctly run risk & issue management can really take the stress out of Project /Programme Management.

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Unbelievably Project Management can be fun!

What is the definition of a project Risk /Issue?

Project Risk – A risk is a set of circumstances, which have not yet occurred, but have been identified as having a probability of occurring in the future. To be designated a project risk, it is essential that these circumstances must have a negative and material impact on the projects designated delivery drivers - Time, Cost, Scope, and Quality. An example of a typical project risk might be excessive staff absenteeism through poor moral. This has all the key features:-

- A realistic probability of occurring

- Should the risk occur it is likely to have a material impact on a projects /programmes delivery drivers.

Project Issue – This is where a specific set of circumstances has actually occurred,  detrimentally affecting with immediate effect all, or some, of a projects /programmes delivery drivers. For example, a lack of a project sponsorship is an example of a typical project issue. It is worth noting that many project /programme issues are often earlier identified risks, which have now been realised. It is perfectly normal during a project to see unmitigated project risks develop into project issues. 

Why is Risk & Issue Management Important? What’s in it for me?

Failed Risk & Issue Management kills projects - I like to draw an analogy with the combustion engine. A project, if run properly, should be like running a well-oiled and maintained engine. However, engines only run properly if they are properly maintained and are operated in the correct environment. If you do not identify risks & issues early, and set-up clearing processes to resolve and mitigate them as the project /programme progresses, then this is the equivalent of pouring sand into an engines air intake and everything grinds to a halt!

The project progresses and the risks and issues build up in number and severity until critical mass is achieved (blocked air intake) and the project /programme of work effectively stops, and in some cases may actually go into reverse. This situation can either cause a project /programme to be shut down permanently (40% of IT projects end up this way each year) or develop into a continuous stop start loop of crisis based issue management (replacing the air filter without stopping the sand).

This stop /start scenario is common, demoralising staff and destroying the authority and respect for the project /programme management team.

Hard hats for Project Managers no longer required – One of the most stressful aspects of Project Management is that a Project Manager /Programme Manager often receives the blame for all Project /Programme ills, whether you are adopting a devolved Agile management approach or something more traditional. Business customers always need sacrificial lambs when all goes wrong.

This is possibly why the annual staff turnover rates for IT Project Managers has been running at 30% per annum, alongside IT project failure rates in the region of 70% per annum. If you are new to the project management game and don’t believe me, you should read the book CRASH which has some of the best publicly available project failure case studies you are ever likely to find.

Effective Risk /Issue management shares the responsibility for a projects success or failure around a project team and the business users /sponsors. It gets everyone involved and embedded in the success or failure of a project or programme of work.

If you don’t do this you could fall foul of the “Coconut Throwing Monkeys”:-

Yeap - if you don’t run fit-for-purpose risk and issue management, you could find yourself underneath the coconut palm with your project team, business users and sponsors (the monkeys) sitting up in the tree next to the coconuts.

Every time you project stops or falters due to criticality on unresolved /mitigated risks and issues, the Monkeys will express their displeasure by throwing large coconuts at you. From experience, you might be able to duck and dive to avoid some of these projectiles, but these monkeys are expert coconut throwers (years of experience). Carry on long enough and sooner or later you will get hit by one. If you are particularly unlucky, one might actually hit you on the head and kill you outright (the sack).

The trick with risk and issue management is to get as many of these monkeys as possible down from the tree and on the ground beside you. That way they cannot hurt you and are now equally as vulnerable to falling coconuts as you are.

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Watch out for those monkeys - There up above you !

Despite the fact that the monkeys hate humans (project managers), they are now forced into cooperating with you in order to avoid being hit by falling coconuts themselves, until the few resistant monkeys left in the tree can be coaxed down.
Risk and Issue management is the most important management and control process to have in place when running a project /programme of work.

Its more important than project plans, quality management, change control or anything else you can think of.

If you don’t do it, your project will be hobbled from the start and may even fail with the ever present risk of falling coconuts putting your life at risk.

Please click PART 2 to see see first post in series

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READER COMMENTS:

i liked it so much… i printed it (only for me of course)

Posted by john  on Fri 25th July 2008 at 02:39 PM | #

Thanks. Hope you enjoy. Please let me know if you can make improvements.

Posted by Kevin Brady  on Sun 27th July 2008 at 04:27 PM | #

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