Explaining risk

It’s not enough to understand risk; project practitioners also must communicate it to stakeholders

Imagine a doctor who tells a patient that he's sick, but doesn't identify the illness. Or a mechanic who tells a customer her car is going to break down, but doesn't say when. This article discusses how project practitioners need to communicate with stakeholders. It notes that for every US$1 billion spent on projects, US$75 million is at risk due to ineffective communications. It explains how project success hinges on the communication of risk and describes the gap between the risks that threaten project outcomes and the stakeholders whose actions are required to address those risks. The article details how communicating risk requires understanding of how stakeholders like to communicate and highlights how stakeholder personalities and organizational roles can affect how project practitioners communicate and what they communicate. Next, it explains how risks worth communicating typically are those where the impact is real, large and immediate. For example, it describes how a product manager partners with stakeholders to develop a risk rating system to identify risks most worthy of their limited time and resources. Furthermore, the article examines how the best communicators connect with stakeholders early and often, noting how one PMO head hosts up to three risk management meetings per week during a project's planning stage. It also looks at how credibility with stakeholders can be increased and describes several ways to make risks relevant, describing how a mix of qualitative and quantitative communication is most effective. The article concludes by explaining how to streamline risk communication and suggests two levels of communication: summary and in-depth interview.
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