Essential tips for managing project risks and issues

Risk management

On any project no matter how big or how small there will be things that come up along the way that threaten the successful delivery of the project. These things are known as the project risks and issues and managing them is part of the Project Manager’s role.
Whilst it might seem that risks and issues can be managed as and when they occur, it can be useful to be a little bit more formal about how you do this. To help you out we’ve listed our top 5 essential tips for managing risks and issues. We have also pulled together suggested headings for a risk and issue log. First of all though let’s answer a question that gets asked a lot: ‘what is the difference between a risk and an issue?’

  • A RISK is something that MIGHT happen, for example ‘there is a risk that the project timescales may be impacted as the new equipment may not arrive on schedule’.
  • An ISSUE is something that HAS happened, for example ‘The arrival of the new equipment has been delayed 1 month which has impacted the project timescales’.

A risk can BECOME an issue, but normally an issue DOES NOT become a risk.
So, what does the Project Manager do to keep the risks and issues under control?

Tip 1 – Create a risk and issue log

It sounds really obvious, but actually writing down the risks and issues helps in the following ways:

  • Ensures they are properly articulated (you often put a bit more thought into something when you write it down and in doing so it helps your understanding of the problem)
  • Provides a visible list that you can share with other people (Project Sponsor, Stakeholders, 3rd party suppliers or other people on your team)
  • Allows you to go back and make notes on the actions that have been taken to resolve
  • Acts as a reminder later in the project. Often a risk will lead to a decision and when things are busy it can be difficult to remember why a decision was taken (I have been there on a several occasions!)

Tip 2 – Don’t spend time on minor risks and issues

It is good to understand the scale or severity of the risks and issues so that you can focus on sorting out the ones that will have significant impact on the project. That way you don’t waste time panicking about risks and issues that only have a minor impact.

An easy way to determine severity of RISKS is to give them a risk rating:

Risk rating = probability of risk occurring x impact that risk will have if it occurs

Normally I would use a scale of 1 (low) to 4 (high). This way you get a rating between 1 and 16.
You can then give the risk a traffic light or RAG (red, amber, green) status.

              Overall risk rating RAG status
                    1 – 5 Green
                   6 – 11 Amber
                 12 – 16 Red

This gives a clear priority to risk management. Red risks will require the most urgent action, followed by amber and then green.

Issues are slightly different as they are something that has already occurred. This means you will have a good idea of how serious they are. We assign an issue a RAG status based on what we know about an issue.

Tip 3 – Figure out what you need to do to fix the risk or issue

This is called MITIGATION. There may be several ways to mitigate a risk or an issue, some more acceptable than others. The result of mitigation should be to reduce the severity of a risk or an issue. For example:

‘There is a risk that the project timescales may be impacted as the new equipment may not arrive on schedule’.

  • Mitigation 1: extend the project timescale to allow for contingency in the delivery of the equipment
  • Mitigation 2: source the equipment from a new supplier who can deliver the equipment on time

Once you have decided how to mitigate a risk or an issue, you can establish what tasks need doing to enable the mitigation and how long they will take. You can then work out the impact on your project (do you need more resource, time, specialist support?), and even put the extra tasks in your plan.

Tip 4 – A risk or an issue can be accepted

Yes, that’s right! You don’t have to mitigate every risk and issue that comes along. When you’ve done your rating you can decide that you will simply ACCEPT the impact of low severity (green) risks or issues. As long as you communicate what the impact is to any relevant people, it is actually ok to do this. It is a good way of freeing up your time to focus on the bigger problems, as well as save on budget.

Tip 5 – Keep track of risks and issues

A project manager should manage the risks and issues, not have the risks and issues manage them.
It pays to review risks and issues regularly e.g. weekly and take a note of any updates (completed actions, new actions, closure of risks or issues). I normally do this when I review the tasks on my project plan. I also use my daily meeting for early identification of new risks. You might want to read our blog post on Daily team meeting: 5 tips for making it count.

We’ve created a couple of examples to help illustrate what we’ve been talking about:

Project risk log

Project issue log

We hope our essential tips have helped you out. We’ve also created you.

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