Risk Management - The Overlooked First Process of Project Planning - Part 1 of 6

Introduction

Project managers understand that Risk Management is a critical part of their projects; however, some methodologies place the start of Risk Management late in project planning.  It is my belief that Risk Management must start at the beginning of a project and be recorded and updated as planning and the project progress; otherwise, the extent or characteristics of a Risk may be misunderstood or improperly tracked.

This entry in the About Project Management blog presents my vision of Risk Management.  I am aware that there are many methods (and opinions) on the best mechanisms for identifying and controlling risks.  I humbly acknowledge the other ways of doing things and invite anyone with an opinion and, better still, details of processes, to step in and participate in this blog.

This blog entry consists of six parts:

1.       Issues and risks

2.       Starting a new project

3.       The Missing Something

4.       Example Risks

5.       Conducting a Risk Workshop

6.       Risk follow-up as the project progresses through the phases

Part 1 of 6 – issues and risks

The differences between issues and risks are often confused among Project Managers and others.

Risks and Issues, as defined by the Project Management Institute (PMI), are

·         Issue: “A point or matter of discussion, debate, or dispute”

·         Risk: “An uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives”

From these definitions, it appears that an issue could be treated the same as a risk. The real difference is its place in time. For example, in summer the risk of a blizzard can be stated as “There is a risk that a blizzard will occur in winter” and planning should start on procedures to deal with the blizzard. In winter, when the blizzard occurs and plans are not available to deal with it, the blizzard has suddenly become an issue and crisis management may be needed in order to deal with this emergency. From this example come the basic conceptual differences between risks and issues. (From a conversation with Michael Lavengood, PMO Director, Mylan Pharmaceuticals, 2005).

·         Risks are identified early in planning so that appropriate steps can be taken to prevent them turning into issues.

·         A risk can turn into an issue if the preventive actions have not been effective or have not been performed.

·         An issue must be dealt with immediately in order to minimize impact on the project.

Part 2 talks about starting a new project.  See you then.

Charles