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November 3, 2004 Volume 4, Issue 44
 
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Status Risk and Risk Status

by

One often-neglected project risk is the risk of inaccurately reported status. That shouldn't be surprising, because we often fail to report the status of the project's risks, as well. What can we do to better manage status risk and risk status?

Warner glared his famous glare, and for once, he had a legitimate complaint. "Let me see if I have this right," he began. "You knew back in July that we had memory footprint problems, but you waited to report it until now. Is that right?"

FootprintsRobin had nowhere to go. "Yes, that's right. We felt it was best to wait until we were sure we had a problem."

"Well, we have a problem now, don't we?" Warner replied.

"Yes, and that's why…" Robin began, but Warner wouldn't let her finish.

"That's why you're reporting it, I know, I know."

Robin has made a serious error, but the mistake isn't hers alone. She failed to alert the project sponsor to a problem when she first became aware of it. And Warner's intimidating style tends to discourage early reporting of trouble.

Together, they're living out one of the consequences of status risk: the risk of failing to report status promptly and fully. Here are some sources of status risk:

Status risk is high
when realistic status
reporting is punishable
Rewarding positive reports and punishing negative reports
At any link in the status reporting chain, the report recipient might be signaling that only positive reports are acceptable. The signal can be unintentional, or it can be very deliberate.
Prior experience
People can bring to the reporting task their experiences with prior projects or prior managers. If they've learned along the way that realistic reporting is punishable, they're likely to apply those past lessons.
Turnover
When new people assume responsibility for work underway, their perceptions about status are likely to be inaccurate.
Wishful thinking
Because most of us want things to go well, we sometimes fool ourselves that our wishes match reality, especially if we've become attached to the task.

Making status reporting a group task helps mitigate status risk. Form a status review team that's responsible for reviewing status reports. Normally, they'll easily reach consensus, but any failure to reach consensus is valuable information in itself — it signals the need for a closer look by management.

Even when we manage Status Risk, there remains the too-common failure to report — or even to track — Risk Status. Most status reports focus on budget, schedule, milestones achieved, work completed, and so on. But we rarely report or track the status of our initial risk profile, and that can lead to surprised (and very upset) project sponsors. Including a review of the risk profile in each status report helps to limit the incidence of surprising disasters.

Status Risk and Risk Status are intimately intertwined. In part, the sources of status risk contribute to our spotty reporting of risk status. And by creating the conditions for surprising disasters, failure to track risk status can enhance status risk. Address both — or don't bother. Go to top  Top  Next issue: The Fine Art of Quibbling  Next Issue
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