Monitor and Communicate Risk
After completing this unit, you’ll be able to:
- Identify common project health dashboard elements.
- Identify common risk register elements.
- Explain the project management triangle.
- Describe the WHIPPED framework.
Risk management is a daily activity. You need ways to streamline your tasks so they don’t take up your whole day. Here we recommend tools and methods to help you efficiently monitor and communicate risk.
A project health dashboard gives you a visual snapshot of project performance. Use the dashboard to monitor key project health indicators such as schedule, cost, and risk as compared to the original project plan.
Common elements include:
- Completed requirements
- Progress on schedule
- Progress on budget
- Initial schedule versus revised schedule
- Initial budget versus revised budget
- Top risks and their statuses
Those are just a few examples. What you include on your dashboard is entirely up to you. Before you choose, talk with your stakeholders. Determine which items are the top project health indicators and include them.
Also consider how much detail to display. Perhaps basic color-coded elements are ideal, or maybe there’s a preference for more detail. In either case, keep it concise. A dashboard has limited real estate. If you want to share more than what fits on the dashboard, write an executive summary and pair it with the dashboard information.
The next time someone asks you how the project is going, find the answer on your dashboard. Better yet, share the dashboard with them!
A risk register is a document or tool you use to record all identified risks. Teams use the register to see exactly what each risk is, who it’s assigned to, and the plans to address it. Keep the format simple. A spreadsheet works well.
As with the project health dashboard, a risk register doesn’t have a standard set of elements. Decide what’s most important to include for your project.
|Risk Register Element
||An explanation of the risk.
||What happens if the risk materializes.
||How the risk affects the project.
||The individual or group responsible for monitoring the risk and, if the risk occurs, addressing related issues.
||One of the following: transfer, eliminate, accept, or mitigate.
||The overall risk score based on the three risk dimensions: probability, impact, and proximity.
||The steps taken to reduce or eliminate the risk.
Remember to share. Risks shouldn’t be solely up to the project manager to identify and record. We recommend that everyone on your team helps keep the risk register up to date.
Risk management isn’t free. When risks happen, project resources dedicate time to address them. Your project budget must account for the cost. Rather than using a blanket contingency percentage as your cost estimate, use your completed risk register to estimate a risk budget. You can learn more about this process from the Risk Budget Best Practices presentation. You can find a link in this unit’s Resources.
In an ideal world, you follow your project plan as written from start to finish. There are no unexpected twists or turns, and risks lie dormant. But we live in the real world and know the original plan typically changes.
Change adds risk. You need a way to visualize and communicate how the change affects the rest of the project. This is where our project management triangle comes in. We use the triangle to illustrate that cost, quality, and time are interrelated. It’s impossible to alter one without impacting the other two.
For example, your customer has a fixed completion deadline, but wants to add a feature, increasing scope. You can’t extend the schedule, so what are your options? You decide to add resources to the project team, but that also increases cost.
Use the triangle to help your team and your customer clearly visualize the relationship between all three elements. Everyone will be keenly aware of how changes in one area impact the others. The added clarity may encourage your customer to be selective about their change requests.
Earlier in the module, we stressed the importance of transparency and good communication. To ensure that happens, create and distribute a communication plan at the start of your project. A communication plan lays out who gets what information. And it lays out when they get that information. In the end, everyone knows what to expect and who to contact about issues. Use it if and when issues arise.
For every risk level—such as low, medium, and high—state what information to share, who to share it with, and when to share it.
- Risk information
- Risk owner
- Owner’s responsibilities
- Owner’s preferred communication methods, such as phone, email, and text
- Communication frequency, such as hourly or daily
Tailor your communication plan to the scale of your project. Less complex projects with smaller teams may only require a simple one-page plan. For example, for a project with a 1-month duration, create a list of stakeholders and their contact information.
For a longer, more complex project with multiple implementations and integrations, use a multipage plan. List the primary stakeholders for each integration. State who to reach out to if the primary stakeholders are unavailable. Identify how to communicate issues that affect multiple areas.
Refer to the plan whenever you have important news to share.
Even with solid risk management processes in place, your project may still hit a snag or two.
The way you react has a huge effect on your relationship with your stakeholders. Avoiding or delaying the delivery of bad news can erode trust. On the flip side, talking about an issue as soon as it comes up builds trust.
Whip Up Trust
While delivering bad news isn’t fun, there is a way to make it a whole lot easier. Use the WHIPPED framework.
||Determine who the issue affects.
||Lead with a description of the issue.
||Explain the effect of issue on the project.
||Identify all viable options to fix or move past the issue.
||Put it in writing
||Wrap up with the reasons why the issue occurred.
||Deliver the news as soon as possible.
The best way to deliver bad news is to be honest and direct. Get right to the point, describe the issue. Next, explain the impact and how you plan to manage it. End with context—describe how the issue happened and how you plan to prevent a recurrence.
While we were busy learning about tools and methods, the cafe manager implemented a risk management system. Let’s see how it’s going.
They followed our process, and things turned out much better.
- Identify: SuperTasty cheese is a popular item. It’s difficult to keep enough in stock.
- Assess: If the cafe runs out of SuperTasty, the risk of lost revenue is high. It’s best to promptly address this risk.
- Address: The cafe chose mitigation to address this risk—order more and offer a substitute.
There is clear communication. During the daily inventory check, the cafe manager discovers SuperTasty cheese stock is low and he informs the chef and waitstaff. He puts their mitigation plan into action and orders more. It’s due to arrive before they run out. But, just in case, the chef and waitstaff select a well-stocked cheese to offer to customers in lieu of SuperTasty.
Everyone loves a happy ending and this time the cafe delivers. On your next visit, you order and receive a SuperTasty cheese sandwich. It’s delicious!
Whether you’re creating sandwiches or an enterprise solution, a satisfied customer is good business. Incorporate risk management into your projects and you’ll also deliver success.