Practical PRINCE2 Risk Management

Many of the Big 5 IT Consultancies consider risk and issue management to be one of the most important project control processes necessary to maximise a projects chances of success. The reasons for this are easy to understand. Properly implemented risk and issue management constantly identifies / resolves and mitigates risk and issues throughout a Project Lifecycle (removing the barriers to delivery).

PRINCE2 Courses
Foundation, Practitioner & Professional
High Pass Rates, Low Class Numbers
Exam Pass Guarantee

From £700

Before we explain how to set-up risk and issue management on your project, let’s start with the basics:-

What is a PRINCE2 Risk?

What is PRINCE2 Issue?

Now we understand what risks and issues are we can now start thinking about How to implement risk and issue management on your project?

How to set-up risks and issues management?

Step 1 – Identify your Projects Stakeholders. To help the following diagram identifies the typical stakeholder groups you would expect to see on a Project. You need to identify the people in each group:-

prince2 project stakeholder groups

Step 2 – Set-up a project organisation. You need everyone who is working in or for the project to have clear roles and responsibilities and to assemble them into a coherent project organisation. This should include a Project Board to provide continuous governance throughout the projects lifecycle. Governance is all about providing constant steer to make sure a project stays aligned with its objectives. Also, this board is a key escalation point for the handling of risks and issues, which are beyond the project manager’s authority to deal with. A typical PRINCE2 project organisation is illustrated below:-

PRINCE2 Project Organisation

Step 3 – Develop a Risk and Issue Management Strategy. PRINCE2 handles these 2 subjects separately and recommends the following:-

  • Risk Management Strategy – A “manual” for how you are going to handle risks on your project.
  • Configuration Management Strategy – A “manual” for how you will handle changes and issues for your project.

This document describes how risks and issue management will be run throughout your project life cycle. PRINCE2 recommends that these strategy documents form part of your Project Initiation, and get the Project Board to review it and sign it off. This legitimises your implementation of the next steps.

Step 4 – Create Risk & Issue Logs /registers (Excel or Word is great for this) and place it on a server with shared access and make it available to all your stakeholders.

Step 5 – “Seed” the logs with Risks & Issues – As Project Manager you should have some idea of the key risks and issues which are facing your project. Populate these logs with your  risks and issues and leave the resolution /mitigation ownership fields blank. No one is charged with the responsibility of removing these barriers to delivery at this stage.

Step 6 – Ask Stakeholders to come forth with new risks & issues – I usually do this request by email and include all the members of the project board. They are all expected to make entries directly in the issue and risk logs and leave the assignment fields blank as in step 5. PRINCE2 recommends that any new risks or issues are notified to the Project Manager so they don’t get overlooked. However, in practice, if you, as a Project Manager, are reviewing your logs regularly it shouldn’t be a problem having other people adding risks and issues.

Step 7 – Set-up weekly Risk & Issue Project Team Meeting – Assemble the project team and work through the risks and issue logs

  • Discuss and assign ownership for each unresolved /unmitigated risk and issue. A risk owner is assigned based on who is the most likely to be able to resolve /mitigate a given risk or issue or keeping an eye on it. An individuals  judged ability to resolve /mitigate a risk /issue is based on the following factors:-
    • Proximity to the risk or issue (directly effects them).
    • The Person has an interest in seeing the risk /issue being mitigated
    • Authority to resolve /mitigate an assigned risk /issue.
    • Capability to resolve /mitigate the risk or issue i.e experience, relevant domain knowledge. 
  • Look at the progress made to resolve /mitigate each risk and issue logged and as team work together to assist the various owners in their struggles to find ways to mitigate /resolve assigned risks and issues.
  • Select risks and issues for Escalation – Assign risks and issues to yourself where it is clear they cannot be resolved or mitigated at project team level and escalated to the project board for further help and assistance or even further risk /issue assignment to a project board member.
  • Check for new Risks & Issues – Do a round table to see if any new risks and issues need to be logged and assigned.

Step 8 – Escalate risks and issues to the Project Board – Report to the Project Board all the project risks and issues threatening the project’s success, plus highlights a subset of the top 10 risks & issues (biggest threats). The purpose of this is so the Project Board can get a feel for the projects current “state of health” and to offer support in reducing the numbers of high impact risks and issues. This support could also include the escalation of issues and risks for specific board resolution / mitigation decisions. The project board would have the power to assign escalated risks and issues to specific board members for later resolution /mitigation.

Just repeat Steps 6 and 7 weekly and Step 8 in accordance with Project Boards wishes and you have done one of the most important things you can do to assure your projects success.

© 2011 – 2012, Kingsmead Internet Investments Ltd. All rights reserved.

PRINCE2 Courses
Foundation, Practitioner & Professional
High Pass Rates, Low Class Numbers
Exam Pass Guarantee

From £700