What is a risk and an issue- Layman Terms

This may be very obvious to someone up to speed with Project Management speak, but it can be a bit of a mystery for those not.

The other week I heard an excellent analogy which makes it crystal clear.

If you are walking down a street and there is a pile of dog muck in front of you there is a RISK that you may walk in it, if you actually step it on, boy you do have an ISSUE.

In another every day scenario, when you are planning your holiday and you have a flight at 9, and you have to travel on the M25 you have a RISK you could miss your flight, if you then miss your flight you have an ISSUE.

You will often hear talk of mitigating risks, in the holiday example a good mitigation would be to book a hotel the night before so removing the risk of travelling on the M25.

Hope these everyday examples, help breakdown some of the project management lingo.

Please leave any comments particularly for any other subjects that could be demystified.

Risks and Issues 

Why have Risks and Issues? 

The cornerstone to successfully managing your project is maintaining on a daily basis your risk and issue log, a good comprehensive list should take away the need for to do lists and then supplement all your reporting requirements both on an internal and external basis. 

It may sound excessive to review daily, but 5 minutes a day is far better than a tortuous 2 hour session every fortnight. It can then drive your to do list for the day.

What do you show your key stakeholders? 

Nobody likes to see a long list of risks with mitigation action points, for an executive summary you should concentrate on highlighting the top 5 risks, and where possible in a graphical format, I like to use the matrix shown below, with clear indication showing where your top risks sit on the matrix. A clear statement stating how many other risks you are managing is useful to give comfort that you are actively managing the risk log.

 

How to rate your risks?

I use the above matrix  but replace the words for numbers which translates into medium = 3 so a medium probability and a medium impact would gain a risk rating of 9, this is particularly useful when you are tracking movement in the risks, it is far easier to track a risk moving from a rating of 15 to 9 rather than moving from medium/very high to medium. 

What is the difference between a risk and an issue?

To be honest it doesn't really matter as long as you have it logged and you are actively managing the item. The general rule of thumb is that a risk is something which might happen whilst an issue is something that has happened. 

You can also have duplicate entries on both your risk and issue log, something may be live and you are dealing with it today, but particularly in a large complex project, an example is around communication, there is a high likelihood that you have an issue following a communication, but with many more communications planned for you need to have them clearly marked on your risk log.