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Risk Reporting

"The risk reporting phase is repeated throughout the project life cycle. It is a critical phase and one that is not done on many projects. The activities and results of this phase directly impact how the project resources respond to risks in an ongoing fashion. This section looks at the critical elements of this phase.

Reporting Objectives

"Building the risk management strategy and the risk assessment list is only the first important step in building a sound process. The next step is to have an effective reporting mechanism that satisfies the following objectives:
  • A description of how to avoid a risk or stop it from occurring. The project team is the key audience for this information.
  • Clarity concerning the potential risks and the costs/benefits of dealing with them. The key audience for this information includes the business owners and the project sponsors.
  • An accurate picture of each risk in the assessment list. This information should be shared with anyone who can provide more details and facts about the risks in the list. It also needs to be shared with the extended project team."

Reporting Process

"The reporting process for risk management needs to provide information but also result in immediate action if problems are detected. The project manager needs to walk through the risk assessment list and verbally summarize the status of each risk during status meetings. The risk report must also be available to anyone from a central intranet or information store."

"By itself, this approach is still limited. It forces the project team to interpret what the project manager really meant through voice tone, word choices, and the intensity of the conversation."

"Some preliminary analysis and summarization is helpful in getting action from the project team. The risk assessment needs to stay in front of everyone involved in the project on an ongoing basis in a format that is easier to interpret than a long list. A summary report, dashboard, or scorecard is helpful in summarizing the status of the current risks, and in ensuring that everyone involved in the project knows which risks require immediate attention."

Reporting Format

"Remember that the main objective of risk management is to get the right people doing the right things to ensure that risks do not occur. This requires a crisp, clean, straightforward reporting format that summarizes information at an appropriate level to raise alarm and concerns in a timely manner. Format and content are everything in achieving this. A dashboard or scorecard that abides by the following provisions is useful for summarizing the relevant risk information:
  • Is the information easy to read and understand?
  • Do I need to look in too many places to get an accurate picture of the current risk status?
  • Is the information organized so that risk trends can easily be spotted or identified?
  • Do the colors tell me what to worry about at a glance? Use basic colors such as red, yellow, and green to convey information. Tones within colors can be used to indicate severity. Ideally, highlight the risk descriptions in their appropriate colors if you have access to a color printer.
  • Ensure that the simple format can be cross-referenced to more detailed information about each risk. Anyone requiring more details should be able to find them in the actual risk assessment report or the status report.
  • Keep information relevant, to the point, and to a minimum. Every reported risk on the dashboard should be important enough to demand executive-level attention on a frequent basis.

"While the purpose of the risk reporting process is chiefly to identify risks that require attention from the project team, there are some additional political considerations. Providing a dashboard that shows a number of risks in red status will cause alarm that could be considered as finger pointing by some."

"It's important to talk with team members and remain sensitive to individual needs and frailties. Perhaps a three-part dashboard that shows the risks that are not currently considered a problem (color green), those that may become a problem (color yellow), and those that require immediate attention (color red) would be useful and less embarrassing."

"This simplified format allows the project manager to focus everyone's attention on what is urgent and immediate. There is no misunderstanding that a risk was reported as a problem. This reporting format is effective for the following reasons:
  • Only risks requiring attention are listed. The other risks can be reviewed in the assessment list for those interested in them.
  • Executive attention gets riveted on the red status items. Executives also see areas of future concern (for example, yellow status items) and can begin to lend their support so that these items do not turn into a crisis.
  • Relevant and related information is grouped together.
  • Some risks can be grouped under a green status on a second page so that high risk items are still up front, but the team can get recognition for things that are going well.

The above is an excerpt from a book written by Sanjiv Purba and Joseph Zucchero, published by McGraw-Hill/Osborne, 2100 Powell Street, 10th Floor, Emeryville, California 94608 U.S.A. Sanjiv has over 20 years of experience managing large projects and many years engaged in rescuing ailing projects.