Communicate risk levels to key stakeholders

Risk communication is a crucial aspect of successful project management. Project managers must articulate the nature and impact of potential risks to all key stakeholders involved in a project. For a professional endorsed with PMI Risk Management Professional (PMI-RMP) certification, this task goes beyond simple risk identification. It is about illuminating the intricacies of risks and how they can influence project outcomes, thereby championing informed decision-making.

Part 1: Importance of Communication in Risk Management

A PMI-RMP professional’s role includes undertaking comprehensive risk management, a critical part of which is communication of risks. Communicating risk levels to key stakeholders guards against potential delays, cost overruns, or even failure of the project.

In the absence of adequate risk communication, stakeholders may develop unrealistic expectations about project timelines, budgets, and outcomes. On the other hand, effectively communicated risk insights can facilitate consensus on risk responses, accommodating and strategizing uncertainties, resulting in a higher probability of project success.

Part 2: Methods of Communicating Risks

Articulating risks to stakeholders can be performed in several ways, depending on the particular project’s nature and the stakeholders involved. The common methods include:

• Risk Reports: Periodic risk reports can offer a comprehensive overview of identified risks, their potential impacts, risk response strategies, and the status of risk mitigation efforts.
• Dashboards: A risk dashboard presents a visual, quick-reference tool for stakeholders, summarizing key risk details such as risk ranking, status, and related actions.

Example: A PMI-RMP professional might use a risk dashboard to visually communicate the three highest-ranked project risks, along with their status (open, mitigated, closed) and planned or ongoing mitigation efforts.

• Presentations: In situations where more detailed explanations are necessary or when decisions must be taken based on risk information, presentations can be the go-to method.
• Meetings and Workshops: Face-to-face meetings or workshops provide an interactive platform to explain risks, see direct feedback, clarify doubts, and collectively strategize responses.

Part 3: Understanding the Audience

Identifying the audience is a fundamental step in effective risk communication. Different stakeholders may require different levels of detail:

• Project team members might need complete information about all project risks to plan their activities.
• Senior leaders or project sponsors might prefer an overview of the most critical risks and their potential impacts on project objectives.
• External stakeholders, such as customers, would be interested in risks that directly affect them or the project deliverables.

The PMI-RMP professional must leverage their knowledge and skills to discern these differences and approach each stakeholder subset with the right communication method and risk information level.

Part 4: Ensuring Stakeholder Understanding

Risk communication should not be a one-way street. Stakeholders should also have space for questioning and clarifying doubts. The PMI-RMP professional needs to ensure that risks are understood as intended. This may require explaining risk concepts and terminologies, discussing potential impacts on project goals, or even providing training on risk management processes.

Example: A PMI-RMP professional might organize a workshop with stakeholders to break down a complex project risk, facilitate discussions on potential impacts and probable responses, and involve them in decision-making on risk mitigation strategies.

Overall, effective risk communication is a linchpin for robust risk management, underpinning informed decision-making and fostering stakeholder confidence in risk response strategies. A PMI-RMP professional, with their consolidation of risk management skills, proves indispensable in this essential project management facet.

Communicating and managing risks is not a luxury for project success—it’s a necessity.