Managing Projects: Risks and Issues (part 3)
Managing Projects: Risks and Issues is a 5 part series providing practical advice and a brand new ‘CARE’ model to third sector project managers.
Part 3: Responding to project risks and issues
Risks are inherent in all projects and risk management is central to the role of a Project Manager. Now that you know the risks your project faces and why (see part 1: Identifying Project Risks) , and you have assessed the risk level (see part 2: Assessing Project Risks), it’s time to take action.
The type of response depends on whether it’s a risk or an issue. Simply put, a risk is an uncertainty, that is in the future. An issue, is something definite and is in the present. Risks are any uncertainty, be these opportunities or threats and there are many ways you might choose to respond.
When selecting your risk response think about your organisations risk appetite, and your projects risk tolerances. Consider which response type offers the best cost and or/time to benefits ratio. You will also factor in the chain of events (i.e. any dependencies and interactions) and the commitment and approval requirements.
A common risk response is to take actions to reduce the risk. This is where you will produce your ‘Mitigation Action Plan’ (MAP). A MAP is exactly what it says on the tin. It’s a written plan of the actions you will take to mitigate (i.e. reduce) the risk. This might be reducing the probability of the risk occurring, or the impact of the risk occurring, or both.
You may put a ‘Contingency Plan’ in place. This is your ‘Plan B’, to reduce the impact should the risk occur. This plan is used as both a risk response (where you know this risk exists so you create the plan in advance) and as an issue response. Issues might also have a ‘Resolution Plan’. The difference between this and a contingency plan is illustrated in the example below:
The project subcontracted an element of its service delivery (in this case C.V writing workshops) to an external supplier and they have failed to deliver the number of workshops required this quarter.
The Contingency Plan might detail another supplier who could be bought in to deliver the workshops or if and how your project delivery team may be able to make up the shortfall.
The Resolution Plan might detail the plan for responding to the subcontractor, to discuss their plan to address the under-performance during the following quarter and how this will be monitored, and agree any impact to them of failure to meet with the contractual agreements for the quarter.
Remember – responding to risks is not a one-off activity. You should continuously monitor your MAPs and resolution plans to ensure they are being followed through, and having the desired impact. You should check your contingency plans to see if they need updating, and as always, continue to perform risk reviews regularly. This is (as stated in earlier articles) one of the core functions of a Project Manager. It’s what makes us so essential in managing projects – making sure they stay on track and dealing with risks and issues, so they can be successful. In our next article, we will look at how we use risks to evolve.
PM3 – Project Management for the Third Sector offers a series of workshops, designed specifically for people managing projects in the Third Sector. Our next training session, Project Reporting and Evaluation Training, is taking place in Birmingham on Wednesday 20th September.
Nikki-Dee Haddleton is Director of PM3 – Project Management for the Third Sector. Incorporating feedback from Third Sector organisations and Project Management professionals they have designed a framework specifically for Project Managers in the Third Sector. PM3 – Project Management for the Third Sector delivers high quality, affordable Project Management consultancy and freelance services, training, support and more.