Risk Reporting and Mitigation
Read this section. Pay attention to risk reporting and mitigation.
8.4 Reporting on Risks
Every well-run organization has its own process for reporting on threats as a project unfolds. In some projects, a weekly status report with lists of threats color-coded by significance is useful. In others, a daily update might be necessary. In complicated projects, a project dashboard, as described in Lesson 11, is essential for making vital data visible for all concerned.
The type of contract binding stakeholders can affect everyone's willingness to share their concerns about risk. In capital projects, the traditional design/bid/build arrangement tends to create an adversarial relationship among stakeholders. As David Thomack, Chief Operating Officer at Suffolk Construction, explained in a lecture on Lean and project delivery, this type of arrangement forces stakeholders to take on adversarial roles to protect themselves from blame if something goes wrong. This limits the possibilities for sharing information, making it hard to take a proactive approach to project threats, which would in turn minimize risk throughout the project. Instead, stakeholders are forced to react to threats as they arise, an approach that results in higher costs and delayed schedules. By contrast, a more Lean-oriented contractual arrangement like Integrated Project Delivery, which emphasizes collaboration among all participants from the very earliest stages of the project, encourages participants to help solve each other's problems, taking a proactive approach to risk. In this environment, it's in everyone's best interests to openly acknowledge risks and look for ways to mitigate them before they can affect the project's outcome.
Whatever process your organization and contract arrangement requires, keep in mind that informing stakeholders or upper management about a threat is meaningless if you do it in a way they can't understand, or if you don't clarify exactly how urgent you perceive the risk to be. When deciding what to include in a report, think about what you expect your audience to be able to do with the information you provide. And remember to follow up, making sure your warning has been attended to.
As a project manager, you should focus on 1) clearly identifying risks, taking care not to confuse project issues with risks, and 2) clearly reporting the status of those risks to all stakeholders. If you are reporting on risks that can affect the health and safety of others, you have an extra duty to make sure those risks are understood and mitigated when necessary.
Source: Board of Regents of the University of Wisconsin System, https://wisc.pb.unizin.org/technicalpm/chapter/managing-project-risks/
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