Risk… so what?

A central responsibility of any project manager is monitoring and controlling (to the extent possible) the outcomes of uncertainties and potential problems that will cross paths with your project.

Spotting a risk is not difficult for most people – especially if you’re a realist or pessimist. The challenge comes in getting the right stakeholders to take action to address the risk. To achieve this, we need to communicate with key stakeholders to first explain the risk, and second, to convince them that it is real enough to act on right now.

But, how do you effectively communicate risk in a way that is convincing? Isn’t it enough just to share all the information we, as a project manager, have and let our listeners gage all the potential issues that can derail the project? No, it’s not enough, and effective risk communication is difficult to master but essential if you ever want to get the necessary leadership support on your project.

A recent PM Network article (attached), discusses a few specific pointers in getting your risk message out effectively and in a way that leads to results.

  • Understand your stakeholders and their preferences – do they prefer written or verbal communication?
  • Censor yourself – be picky about the risks you choose to communicate vs. not (for example, choose risks that are clear, immediate, and can be acted on now)
  • Build credibility – utilize experts in the room to help validate the facts you are sharing
  • Be clear – in your communication, crisply communicate only the information that is critical for making a judgment call
  • Make risks relevant – use anecdotes and stories to explain why the risk is real and relevant to the stakeholder
  • Meet early – be proactive and communicate with stakeholders early and often; do not wait until it’s nearly too late to act

What are some effective actions you have you taken at your company to get leaders to listen and taken action when sharing a risk?

When is the last time you identified and communicated a risk, and what was the outcome of this? Was the risk addressed effectively, and if not, why not?

Risk Article – PM Network Magazine

12 thoughts on “Risk… so what?

  1. Good post. I want to learn more about risk in the role I am now in.

    I really like the “Build credibility” bullet above. Just the other day I was relaying a story to decision makers who have access to upper management. I basically had a very well liked and respected person with me and had them echo my worries about a certain risk to the project that I am working on. After she gave her assessment and validated my concern, I then turned to the other managers that were present who have access to upper management and told them that we need a communication from the C-suite regarding this risk. It think it worked, as I believe that executive will be discussing this risk in the next directors’ meeting she holds.

    1. Taking no for an answer doesn’t have to be the end. If the team had explained to the organization that by not having access to their logo, or promotional items the event may not be as successful then they may have had a better chance on getting access to those materials. This ties back to earlier posting that finding a restaurant that is more cooperative with hanging up these promotional items would have made for a better turn out. I have seen similar types of events hosted at my school where the school community is made aware of the event through promotional items ahead of time and the event has a great turn out.

  2. I love this! I really like the point about censoring yourself. That way it makes the risk you address a priority and cuts out the unnecessary or excess discussion, planning, or work. Overall the tips seem to emphasize streamlining communication and limiting it to only necessary and important info which I believe always sends a stronger message.

  3. Very good topic – I deal with this all the time and it is challenging. You have to walk a fine line between pessimist and realist, and then convince your boss that you are right! What I have found that works best for me is to communicate the perceived risks on projects in a consistent manner to my boss. There are a million different risks on the projects, and its easy to become a pessimist and act like the sky is falling. But I try hard to have realistic expectations for risk, and then present them in a consistent manner from project to project. This way, when I feel like there is some unusually risky aspect of a project, my boss understands I am sincerely concerned about it and he will give it the attention it deserves. Additionally, we have good communication between us that is hugely beneficial when dealing with risk issues as well.

  4. This is a very good blog and it is one of the most widely discussed topics in the United States. Risk taking on one hand can be rewarding on the other hand it can be challenging and gruesome. I would like to highlight your point of bring clear with the management. When you take a risk it can be either big or small but it is important for any project manager to bring everyone on the same page. Communicate with everyone about the risk involved and be open to suggestions about what must be done. For a project manager it is important that he is clear and straight forward about his polices and as well as his steps as to how he can eliminate the risk in the future.

  5. Great post, Milena. As you know, the idea of risk turns most people off right away. To effectively communicate risk, I’ve come to understand that it is important to give all the information possible to those who are making the decisions. Currently, we have so many devices and can run so many analytics that decision making in terms of “some risk has become easier. Having all these tools and resources builds credibility and allows decisions makers to game plan early on instead of relying on tips or “hunches”, therefore minimizing risk in some cases.

  6. Great post Milena !
    There was one bullet point that stood out among the others “Be Clear”; I’ve once found myself in a situation where I let my nerves get the best of me, which impeded with successfully receiving a needed resource from management. All risky decisions make people uneasy, but by effectively utilizing these tips, one is more likely able to be more successful.

  7. Nice post. I agree, the topic of risk can be controversial and some people can be overwhelmed by the information. These are great tips to help. It is also important for the project manager to be able to communicate effectively. I like the “make risk relevant” point the best because it helps people understand the risk and make a connection to the stakeholder.

  8. This is a very clear and insightful post on communicating risk. I like to use most of those options when explaining risk but favorites are be clear and meet early. I like the combination of both because it shows I’m on top of any upcoming problems and am transparent in my operations.

  9. As a project manager it is important to gather the right information before execution. For example, if a customer is prepared to sign a contract for a large sum with the fact that all features are developed for him, then it is very important to be organized and distribute tasks accordingly. Taking risks is important part of the process, as it is important to challenge yourself and other ideas to make correct decisions. Since as we all know, at the end of the day it all comes down to results.

  10. Great post! After years of in the business world you sort of build this imaginary cautionary wall. But, to reap the benefit of success there needs to be risk. Personally, I don’t consider myself pessimistic but, I feel that I take calculated risks and at times opportunities pass by. But, I like the point about building credibility. Not only personal credibility but, tapping your network into vouching and giving their expert advice on the matter. Currently I am thinking of starting a volunteer program in my university. I feel that I can utilize these advice to my advantage.

  11. Communicating effectively to anyone, especially leaders, requires confidence in what you are communicating. Let them know that you understand the risk, and like the article said, utilize experts as well. Back up your claim as confidently and concretely as possible. If you sound unsure, then there is no reason for anyone to buy into what you’re trying to communicate.

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