Risk Reporting: Communication & Techniques

Instructor: Martin Gibbs

Martin has 16 years experience in Human Resources Information Systems and has a PhD in Information Technology Management. He is an adjunct professor of computer science and computer programming.

In this lesson, you will learn how to communicate portfolio risks to stakeholders. Risk-reporting techniques will be discussed; these tools can help you get the attention and resources needed to reduce risk in your portfolio.

Reporting Risk

All projects come with a certain amount of risk, both internal and external. This risk must be managed and evaluated continuously to ensure the success (or cancellation) of a project. Furthermore, you will need to communicate to stakeholders so that they are fully engaged and aware of issues.

Your portfolio should include a risk register that is updated continuously. If you don't have an assessment of your risks and where you stand with them, you can't communicate them effectively to stakeholders!

The risk register should be available to all stakeholders so they are continually aware of the risks to the portfolio. However, you aren't necessarily guaranteed that they will go out and constantly check the risks.

In many organizations, communication can be difficult. Sometimes you don't even have a full grasp of who the stakeholders are! However, it is important to communicate portfolio status and portfolio risk with all stakeholders. At the very least, these stakeholders should be listed in the charter for the portfolio.

Below are a few means of communicating risk, from a project level to a corporate level:

Project-Level Reporting Risk registers Monthly status reports

Corporate-Level Reporting Risk response plans Risk sheets/reports

Reporting to Stakeholders: How-To

Imagine that you spend hours each month preparing detailed portfolio reports for stakeholders. Within these, you include metrics and statuses of projects, including the most current risk forecast. Due to several outside factors, several key projects are at serious risk of derailing the entire portfolio.

But nobody responds to your warning. Why?

Like you, stakeholders are busy. They probably aren't reading your reports, as much as you worked on getting them ready. An option for reporting is to create a specific risk-focused document.

A separate document highlighting the risks is easier to digest. Plus it puts the urgency front-and-center for stakeholders. The first page could be as simple as a table like the following:

Project Name Risk Status Key Driver
Diamond Mine Upgrade CRITICAL Government collapse
Server Migration Medium 2018 Funding
Free Lunch Fridays Low None

Another option is to include a modified version of the risk register for stakeholders to view. Below is a snippet from a project portfolio that highlights projects at-risk in red. Stakeholders can see at a glance:

Graphics Tell the Story

Even though you can develop concise reports, sometimes a picture says it all. Stakeholders will likely skim pages of text, or even a spreadsheet like the one displayed earlier. Instead, distill your information into a graphical snapshot of the risks.

The graphic below is a gauge that shows the risk creeping into the red. Note that YOU would be calculating the true numbers for the gauge; to do this you need an accurate risk register!

Graphical tool for reporting risk
Graphical tool for reporting risk

Upon seeing the above, stakeholders will likely start asking questions. With their help and guidance, you can ensure that all hands are on deck in the project and portfolio management process.

Another graphical option is a tornado graph, which shows risk vs reward for projects in the portfolio. Below is an example of the projects and their risk (red) vs return on investment assessments (blue):

Reporting risk - tornado graph
Reporting risk - tornado graph

Communication is Key!

If you want a response from stakeholders in terms of risk management and mitigation, you MUST communicate. However, we know that stakeholders don't always read, or fully understand, the message being relayed to them. Therefore it is important to create a communication strategy specifically targeted to risk communication.

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