Risk Management vs. Issue Management – Surviving the Dangerous Gray Areas

Imagine Indiana Jones in Raiders of the Lost Ark if he were “asleep at the switch.” How long would he survive? Just barely seconds into the film of course.

Fortunately, as a project manager, you normally don’t have to have the steady nerves Harrison Ford portrays so well in those steely eyes. Well, depending on your particular project, at least. Projects like that are out there. Realistic project managers know that their project life is continually presented with the unexpected, no matter how meticulously they have planned. In fact, it’s recognized that while having no plan is usually a guarantee of failure, any plan, no matter how perfect, will be continually challenged with curveballs and challenges and thus change.

So survival as a project manager can’t be separated from effective risk management. The necessary skills in the art can take years to mature, but even if you’re new to the subject you can get started right away and make a difference. In this article, we’ll attempt to get you started with immediate payoff and get you past a point of frustration often encountered when one is just beginning.

Risks Vs. Issues Vs. Tasks: Massive Confusion

OK. Simply put (more on this later) no one disputes the simple conceptual definitions that an issue is something that needs to be resolved and a risk is something that could affect your project’s results either positively or negatively in the future. The devil, as they say, is in the details and nuances.
It’s common in the literature to have one of the types of issues defined as a risk that is realized (has already begun to occur). In fact, this definition is widely used and successfully so by accomplished practitioners. It isn’t wrong.

Compounding this perplexing subject is the fact that issue management tools are often (and quite usefully) extended to serve the purposes of risk and task management so the terms get thrown around casually. After all, any issue can be defined as a task for its resolution. Preventing any risk can be a task. But as we shall see below, the resultant confusion can be a problem unless you can sort things out properly.

For its part, the Project Management Institute’s Project Management Body of Knowledge Fifth Edition doesn’t make the direct connection between issues and risks, and I think quite properly so. In it, an issue is described as “A point or matter in question or in dispute, or a point or matter that is not settled and is under discussion or over which there are opposing views or disagreements.” A risk is defined therein as “An uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives.” Note the key words if it occurs.

Don’t be Lulled to Sleep by the Forest – See the Dangerous Trees

So it’s not unusual in your trek to avoid all the curves and roadblocks thrown your way to become frustrated when deciding what to put in the risk register. Even worse, though, is the temptation to define every bad thing that can happen as a risk. That’s bad for two reasons. First, your risk register becomes so large that it is difficult to prioritize and focus on the most appropriate items. Second, project management can become complicated because things that clutter up the risk list (referred to usually as the risk register) should instead be in other task lists in your management system rather than fragmented here and there.

Sorting it All Out

Let’s begin by stating more clearly the classic criteria that can be used to classify something as a risk.

  1. As stated more formally above, it should be something that can positively or negatively affect the outcome of your project or program. Yes, for some it seems a bit odd to talk about positive impacts as risks, but that’s the classic definition today, and looked at in the following way, it makes sense. For example, in the future, you might have an opportunity to greatly expand the reach and benefits of your project many times over, but not be prepared to do so before the opportunity is lost. So, yes, that can be a risk, but we digress from the main point.
  2. Second, the risk must not yet have materialized – it must be a future potential situation.

As stated before, there is the temptation to list too many things as risks. In your new open source software product, Nuclear Plant Controls for Dummies, there may the chance that the end user confuses the shutdown button for the continue button. After all, that’s a risk is it not? It could have a negative impact on your project and it hasn’t happened yet. It fits the definition perfectly, strictly speaking.

Sure, it is a risk in a certain sense of the word, but for your project management it is not a risk but rather a design consideration that must be considered in your specification and testing and potentially be entered as a task for correction. In other words, you have control over this matter. It’s a design consideration. You as project manager can see that it doesn’t happen.

And thus there is yet a third useful criterion for defining risks:

  1. The matter should be outside the control of the project manager.

And there are no doubt dozens or hundreds or thousands of such things to worry about. And, if you let them, you’ll have them clog up your risk register to the point that you’ll just throw up your hands in frustration. Most of these things belong in your development task list.

So it is that the risk register should be relatively small, with the attendant advantage that you as project manager can assure that your team gives its contents the focus it deserves.

Here’s another key distinction. Matters such as the nuclear plant power button are things that you KNOW you will have to deal with. The beauty of your risk register is that it contains things that, in the future, you will decide whether to invest work in or not.

Our point here doesn’t really conflict with our friends who define an issue as a realized risk. Go ahead and use issue management in any way you like in risk management. You can even define your plans for mitigating potential risks as issues or tasks. Just carefully protect your risk register.

Better Living Through Risk Management

It goes without saying that your quality of life both personally and professionally should be much better with good risk management. Hopefully this information helps you improve what you are already doing, or, if you’re new to project management hopefully this is enough information to enable you to begin baby steps in risk management today. You’ll find a plethora of information out there, and as mentioned earlier, your effectiveness in risk management will continue to mature for many years.