Ninety percent of a project manager’s job is communication. And one of the most important things to communicate is your risks. How do you communicate risks?
Communicating Project Risks
1. Understand Your Stakeholder Needs and Preferences
It all starts with your stakeholder. We can’t manage expectations if we haven't identified the individuals, groups, and organizations who may impact your project or be impacted by your project. As you initiate your projects, conduct interviews with the stakeholders and ask:
- What are your needs?
- What are your concerns?
- How would you like for me to communicate with you?
2. Analyze Your Risks
We cannot communicate the things that we don’t understand. As risks are identified, assign a risk owner. Find the person who has the appropriate knowledge of the risk and the skills to analyze, monitor, and respond to the risk. Work with the risk owner to define the risk:
- Risk. What is the risk? What event or condition may occur that may impact the project?
- Cause. What is causing the risk?
- Impact. If the risk were to occur, what objectives (e.g., schedule, budget, scope, quality) would be impacted?
Next, perform a qualitative risk analysis looking at the probability and impact using well-defined rating scales. Furthermore, you may also perform a quantitative risk analysis. Quantitative data such as risk impact expressed in time and dollars will help stakeholders better understand the risks.
3. Communicate the Risks
Now, we've identified the key stakeholders and we understand the risks. How should we communicate the risks?
The information we share depends on each stakeholder’s needs and preferences. Many times I’ve been asked to speak to a company board. I’ve always presented a high-level summary of risks, the potential impacts, and how we were responding to the risks.
When reporting to a busy executive sponsor, keep the communication simple and straightforward. Highlight the top risks and what the risk owners are doing to manage the risks.
In contrast, we need to share more detail with other stakeholders. Imagine being a part of a program team comprised of seven projects. The program manager facilitates a program risk review with the project managers and asks each project manager to share the risks that may impact other projects within the program. These discussions require more in-depth conversations.
In summary, project managers should aim to share the right risk information at the right time with the right people. Keep the communication simple. Help people see how they can reduce threats and seize opportunities.
How About You?
It’s your turn to take action. In one of your projects, identify the stakeholder communication preferences, analyze your risks, and communicate the risks. Ask your team to help you review and improve the communications process.
Join the Project Risk Management Academy
Attention, project managers! Unmanaged risks lead to troubled projects. The Project Risk Coach teaches project managers how to identify, analyze, and manage risks that result in thriving projects and a vibrant career. Learn to apply project risk management to deliver your projects more consistently.