Recognize when a risk becomes an issue

Concepts

Within the rigorous and complex sphere of Project Management Professional (PMP) exam preparation, understanding the transition from risk to issue is crucial. Effectively managing these changes can have a significant impact on project outcomes and are a vital part of a Project Manager’s toolkit of skills.

Difference between Risk and Issue

Risk and issue are two terms often misunderstood and used interchangeably in project management, but they have distinctly different meanings.

Risk refers to the possibility of something undesirable happening in the future, which could have a negative impact on the project. Risks are inherently uncertain but can be anticipated and, therefore, mitigated or planned for using various risk management strategies.

On the other hand, an issue is an event that has already occurred. Unlike risks, which are potential threats, issues are actual problems that have materialized and are affecting the project in real-time. Unfortunately, no planning can avoid an issue once it occurs; therefore, timely responses and recovery plans become crucial.

	Risk	Issue
Definition	A potential problem that might occur.	A problem that has already occurred.
Management	Can be anticipated and planned for	Requires immediate action and solution

Recognizing When a Risk Becomes an Issue

The transition from risk to issue happens when the negative event predicted by the risk scenario materializes. When a known risk morphs into an actual problem affecting the project, it becomes an issue.

To determine if a risk has morphed into an issue, it’s essential to continuously monitor and assess the progress of your project against established benchmarks and key indicators. Regularly check whether any of the risks that you are managing shows signs of occurring.

For example, let’s consider you are managing a software development project, and one of your identified risks is that a key developer might leave the project midway, impacting the project delivery timeline. If the developer indeed announces their decision to leave, this risk becomes an issue, necessitating immediate response and action to prevent project disruption.

Transforming Risk into Opportunity

While the transition of a risk to an issue generally has negative connotations, it can also present an opportunity if managed well. When a risk becomes an issue, the inherent uncertainty goes away, replaced by a known problem to address.

With a considered strategy, a project manager can turn this situation around. In our example with the software development project, while losing a key developer could be a setback, it could also present an opportunity to hire a new developer with fresh perspectives and potentially innovate the product or process.

Dealing with Risks and Issues

Dealing with risks and issues involves two different sets of management approaches. Risk management involves identifying, assessing, prioritizing, and planning responses for risks that could potentially impact the project. Plans in place might include risk mitigation strategies, risk transfer, or even accepting the risk if its impact is insignificant.

Once a risk has transformed into an issue, the project manager must act quickly to lessen the impact on the project. Issue management steps involve identifying the issue, working out the impact, determining a course of action, implementing a solution, and reviewing the outcome.

Understanding and identifying the transition of a risk into an issue is an essential skill in the arsenal of a PMP aspirant. Balancing preventive measures with responsive actions is the key to successful project management.

Answer the Questions in Comment Section

True or False: A risk becomes an issue when it has occurred.

Answer: True

Explanation: A risk is an uncertain event that, if it takes place, can have an impact on the project’s objectives. When that event occurs, it becomes an issue that must be dealt with.

Who is responsible for identifying when a risk has become an issue in project management?

a) Project Manager
b) Stakeholder
c) Sponsor
d) Team member

Answer: a) Project Manager

Explanation: While all team members should be vigilant about risks and issues, it is the project manager’s responsibility to formally recognize and deal with them.

Multiple Choice: Risks differ from issues because risks are:

a) always negative.
b) the same as problems.
c) potential problems, while issues are present problems.
d) easier to manage.

Answer: c) potential problems, while issues are present problems.

Explanation: Risks are potential problems that may or may not come to fruition; issues are problems currently impacting the project.

True or False: Risks can be both negative and positive, while issues are always negative.

Answer: True

Explanation: Risks can refer to potential obstacles (negative risks) or potential opportunities (positive risks). Issues, however, are problematic circumstances actively affecting the project and are therefore negative.

Which of the following is a strategy for dealing with a risk that has become an issue? Select all that apply.

a) Ignoring the issue
b) Engaging in problem-solving techniques
c) Utilizing the contingency plan
d) Communicating the issue to relevant stakeholders

Answer: b) Engaging in problem-solving techniques, c) Utilizing the contingency plan, d) Communicating the issue to relevant stakeholders

Explanation: Problems need to be directly addressed, not ignored. The project manager can engage in problem-solving, enact a contingency plan or communicate the issue to stakeholders for transparency and collaborative solutions.

True or False: An issue does not require any immediate action.

Answer: False

Explanation: An issue is an event that has already occurred and is negatively impacting the project. Thus, it requires immediate attention and action.

Regularly updating which of the following will help to recognize when a risk becomes an issue?

a) Risk register
b) Project proposal
c) Contract
d) Meeting minutes

Answer: a) Risk register

Explanation: The risk register helps to track and monitor risks. Regularly updating it can help to identify when a risk has transpired and thus, became an issue.

True or False: The issue log incorporates an action plan to resolve each issue.

Answer: True

Explanation: The issue log lists all identified issues, their status, and the actions needed to resolve them – these are key steps in dealing with a risk that has materialized into an issue.

Which of the following is not a valid indicator that a risk has become an issue?

a) Experiencing difficulties in reaching project objectives
b) Having an abstract fear of a potential problem
c) Witnessing the risk event occurring
d) Seeing an increase in costs or time needed

Answer: b) Having an abstract fear of a potential problem

Explanation: While fear or concern of a risk can push us to prepare effectively, it is not a concrete indicator that a risk has already become an issue.

True or False: All risks eventually become issues.

Answer: False

Explanation: Risks are potential problems that may or may not materialize. Therefore, it is not accurate to say that they will all eventually become issues. Some risks are mitigated and never become issues, while others may.

The first step to take when a risk becomes an issue is:

a) Document it
b) Analyse it
c) Solve it
d) Escalate it

Answer: a) Document it

Explanation: Documenting an issue is key as it provides a clear understanding of what has transpired and informs subsequent steps like analysis, resolution, and potentially, escalation.

True or False: Risks becoming issues cannot be prevented.

Answer: False

Explanation: Risks can be mitigated through effective risk management strategies. Although not all risks can be eliminated, many can be dealt with proactively to prevent them from becoming issues.