Conventional Project Management wisdom is that risks are unfavorable things that could happen, but have not yet happened, whereas issues are unfavorable things that have occurred. Yet, in the real world of managing complex projects, thinking that there is a binary distinction between risks and issues is shortsighted and potentially dangerous. By thinking of them separately we tend to focus on, and manage them separately. When we do that, we compartmentalize the information and constrain the thinking about potentially better, more holistic actions that should be taken. Thus limited in our thinking, we are positioned to be surprised and unprepared, and that is a dangerous place to be in a business critical, fast moving project.

It is my belief that project risks with sufficiently high likelihood and consequence are indistinguishable from issues, and must be treated as such. Here are a few ideas to help Project Managers handle the risk-to-issue transition process.

• Be a Project and Knowledge Manager. Projects are about the creation and transformation of knowledge in to products and services that satisfy customer wants and needs. The Project Manager provides the planning, sequencing, direction, monitoring and control of that knowledge transformation process. Risks represent a lack of, or uncertainty in, the knowledge required to execute a project. A significant part then, of the Project Managers job must be to close those knowledge gaps. Sometimes closing the knowledge gap means deciding that a risk is so high, and presents such a threat to the Project, that it’s more effective to assume it is an issue.
• Develop an early and complete understanding of your Customers and Sponsors risk tolerance threshold. Even if a risk hasn’t officially been realized, there is probably a likelihood/consequence level at which Customer and Sponsor “worries” turn in to pain, demanding the transition from aggressive mitigation action to aggressive corrective action.
• Use a common management system to assess and track risks, and issues. Managing them in the same tool will provide better visibility and integrated decision-making. I might add here that opportunities should also be included in this common tool. Just as with risks, as opportunity levels grow in probability and value, there is an optimal point at which an exploitation decision should be made.
• High risks must have both mitigation and contingency plans. Plan and work effectively to mitigate risks that threaten the project, but also build and maintain a Contingency plans that can be put into effect when that threat exceeds the tolerance threshold.
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These ideas may seem obvious to many of you, but it’s been my experience that there are at least some Project Managers out there who are still caught in the trap of binary state risk and issue thinking. I hope this blog provides some additional insight for them.