CHAPTER 10 PROJECT COMMUNICATION

MANAGEMENT
There are five main processes in project communications management:
1. Identifying stakeholders involves identifying everyone involved in or
affected by the project and determining the best ways to manage
relationships with them. The main outputs of this process are a stakeholder
register and stakeholder
management strategy.
2. Planning communications involves determining the information and
communications needs of the stakeholders: who needs what information,
when will they need it, and how will the information be given to them. The
outputs of this process include a communications management plan and
project document updates.
3. Distributing information involves making needed information available to
project
stakeholders in a timely manner. The main output of this process is
organizational process assets updates. Recall from Chapter 4 that
organizational process assets include formal and informal plans, policies,
procedures, guidelines, information systems, financial systems, management
systems, lessons learned, and historical information that help people
understand, follow, and
improve business processes in a specific organization.
4. Managing stakeholder expectations involves managing communications to
satisfy the needs and expectations of project stakeholders and to resolve
issues. The outputs of this process are organizational process assets
updates, change requests, project management plan updates, and project
document updates.
5. Reporting performance involves collecting and disseminating performance
information, including status reports, progress measurements, and forecasts.
The outputs of this process are performance reports, organizational process
assets updates, and change requests.
A simple way to document basic information on stakeholders is by creating a
stakeholder register, a public document that includes details related to
the identified
project stakeholders. These details include the stakeholder s name, position,
if he/she is
internal or external to the organization, project role, and contact information.
It might
also include information on stakeholder requirements and expectations.
A stakeholder management strategy is an approach to help increase the
support

of stakeholders throughout the project. It includes basic information, such as

stakeholder names, level of interest in the project, level of influence on the
project,
and potential management strategies for gaining support or reducing
obstacles from that
particular stakeholder. Since much of this information can be sensitive, it
should be
considered confidential.
A stakeholder management strategy is an approach to help increase the
support
of stakeholders throughout the project. It includes basic information, such as
stakeholder names, level of interest in the project, level of influence on the
project,
and potential management strategies for gaining support or reducing
obstacles from that
particular stakeholder. Since much of this information can be sensitive, it
should be
considered confidential.
The communications management plan should address the following items:
1. Stakeholder communications requirements
2. Information to be communicated, including format, content, and level of
detail
3. Who will receive the information and who will produce it
4. Suggested methods or technologies for conveying the information
5. Frequency of communication
6. Escalation procedures for resolving issues
7. Revision procedures for updating the communications management plan
8. A glossary of common terminology
Project sponsors can usually rank scope, time, and cost goals in order of
importance
and provide guidelines on how to balance the triple constraint. This ranking
is shown in
an expectations management matrix, which can help clarify
expectations.
Performance reporting keeps stakeholders informed about how resources
are being used to
achieve project objectives.
Status reports describe where the project stands at a specific point in time.
Recall the importance of the triple constraint. Status reports address where
the

project stands in terms of meeting scope, time, and cost goals.

Progress reports describe what the project team has accomplished during
a
certain period. Many projects have each team member prepare a monthly or
sometimes weekly progress report. Team leaders often create consolidated
progress
reports based on the information received from team members.
Forecasts predict future project status and progress based on past
information and
trends.
Status review meetings are a good way to highlight information provided
in important project documents, empower
people to be accountable for their work, and have face-to-face discussions
about important
project issues.
Blake and Mouton
(1964) delineated five basic modes for handling conflicts: confrontation,
compromise,
smoothing, forcing, and withdrawal.
1. Confrontation. When using the confrontation mode, project managers
directly
face a conflict using a problem-solving approach that allows affected parties
to
work through their disagreements. This approach is also called the
problemsolving
mode.
2. Compromise. With the compromise mode, project managers use a giveandtake
approach to resolving conflicts. They bargain and search for solutions that
bring some degree of satisfaction to all the parties in a dispute.
3. Smoothing. When using the smoothing mode, the project manager
deemphasizes
or avoids areas of differences and emphasizes areas of agreement. This
approach is also called accommodating.
4. Forcing. The forcing mode can be viewed as the win-lose approach to
conflict
resolution. Project managers exert their viewpoint at the potential expense of
another viewpoint. Managers who are very competitive or autocratic in their
management style might favor this approach.
5. Withdrawal. When using the withdrawal mode, project managers retreat
or

withdraw from an actual or potential disagreement. This approach is also

called
avoiding and is the least desirable conflict-handling mode.
More recent studies recognize a sixth conflict-handling mode:
6. Collaborating: Using the collaborating mode, decision makers
incorporate different
viewpoints and insights to develop consensus and commitment.
SharePoint portal allows users to create custom Web sites to access
documents and
applications stored on shared devices. Google Docs allow users to create,
share, and
edit documents, spreadsheets, and presentations online. A wiki is a Web site
designed
to enable anyone who accesses it to contribute or modify Web page content.
The project manager and project team members should all prepare a
lessonslearned
report a reflective statement documenting important things they have
learned
from working on the project.
Web logs, or blogs, are easy-to-use journals on
the Web that allow users to write entries, respond to another poster s
comments, create links,
upload pictures, and post comments to journal entries. Blogs have also
become popular as a
communication technology.
blogs easy to use journals on the Web that allow users to write entries,
create links, and
upload pictures, while readers can post comments to journal entries
collaborating mode a conflict-handling mode where decision makers
incorporate different
viewpoints and insights to develop consensus and commitment
communications management plan a document that guides project
communications
compromise mode using a give-and-take approach to resolving conflicts;
bargaining and
searching for solutions that bring some degree of satisfaction to all the
parties in a disputeconfrontation mode directly facing a conflict using a
problem-solving approach that allows
affected parties to work through their disagreements
expectations management matrix a tool to help understand unique
measures of success
for a particular project

forcing mode using a win-lose approach to conflict resolution to get one

s way
forecasts used to predict future project status and progress based on
past information and
trends
Google Docs online applications offered by Google that allow users to
create, share, and
edit documents, spreadsheets, and presentations online
groupthink conformance to the values or ethical standards of a group
issue a matter under question or dispute that could impede project
success
issue log a tool to document and monitor the resolution of project issues
lessons-learned report reflective statements written by project
managers and their team
members to document important things they have learned from working on
the project
progress reports reports that describe what the project team has
accomplished during a
certain period of time
project archives a complete set of organized project records that
provide an accurate history
of the project
SharePoint portal allows users to create custom Web sites to access
documents and
applications stored on shared devices
smoothing mode deemphasizing or avoiding areas of differences and
emphasizing areas of
agreements
stakeholder register a public document that includes details related to
the identified project
stakeholders
stakeholder management strategy an approach to help increase the
support of
stakeholders throughout the project
status reports reports that describe where the project stands at a
specific point in time
wiki a Web site that has a page or pages designed to enable anyone who
accesses it to
contribute or modify content
withdrawal mode retreating or withdrawing from an actual or potential
disagreement

CHAPTER 11 PROJECT RISK MANAGEMENT

Project risk management is the art and science of identifying, analyzing,

and responding to
risk throughout the life of a project and in the best interests of meeting
project objectives.
A frequently overlooked aspect of project management, risk management
can often result
in significant improvements in the ultimate success of projects. Risk
management can have
a positive impact on selecting projects, determining the scope of projects,
and developing
realistic schedules and cost estimates. It helps project stakeholders
understand the nature
of the project, involves team members in defining strengths and weaknesses,
and helps to
integrate the other project management knowledge areas.
Good project risk management often goes unnoticed, unlike crisis
management. With
crisis management, there is an obvious danger to the success of a project.
A general definition of a project risk, therefore, is an uncertainty that can
have a negative or
positive effect on meeting project objectives.
negative risk management is like a form of insurance. It is an activity
undertaken to lessen the impact of potentially adverse events on a project.
Positive risk
management is like investing in opportunities. It is important to note that
risk management
is an investment there are costs associated with it.
Risk utility or risk tolerance is the amount of satisfaction or pleasure
received from a
potential payoff.
There are six major processes
involved in risk management:
1. Planning risk management involves deciding how to approach and plan
the
risk management activities for the project. By reviewing the project scope
statement; cost, schedule, and communications management plans;
enterprise
environmental factors; and organizational process assets, project teams can
discuss
and analyze risk management activities for their particular projects. The
main output of this process is a risk management plan.

2. Identifying risks involves determining which risks are likely to affect a

project
and documenting the characteristics of each. The main output of this process
is the start of a risk register, as described in more detail later in this chapter.
3. Performing qualitative risk analysis involves prioritizing risks based on
their
probability and impact of occurrence. After identifying risks, project teams
can
use various tools and techniques to rank risks and update information in the
risk register. The main output is risk register updates.
4. Performing quantitative risk analysis involves numerically estimating the
effects of risks on project objectives. The main output of this process is also
risk
register updates.
5. Planning risk responses involves taking steps to enhance opportunities
and
reduce threats to meeting project objectives. Using outputs from the
preceding
risk management processes, project teams can develop risk response
strategies
that often result in updates to the risk register, project management plan,
and
other project documents as well as risk-related contract decisions.
6. Monitoring and controlling risk involves monitoring identified and residual
risks, identifying new risks, carrying out risk response plans, and evaluating
the
effectiveness of risk strategies throughout the life of the project. The main
outputs of this process include change requests and updates to the risk
register,
organizational process assets, project management plan, and project
documents.
Planning risk management is the process of deciding how to approach and
plan for risk management activities for a project, and the main output of this
process is a risk management
plan. A risk management plan documents the procedures for managing
risk throughout the
project.
In addition to a risk management plan, many projects also include
contingency plans,
fallback plans, and contingency reserseveral contingency plans on where to
live after graduation, but if none of those
plans works out, a fallback plan might be to live at home for a while.
Sometimes
the terms contingency plan and fallback plan are used interchangeably.

Contingency reserves or contingency allowances are provisions held by

the
project sponsor or organization to reduce the risk of cost or schedule
overruns
to an acceptable level. For example, if a project appears to be off course
because the staff is inexperienced with some new technology and the team
had
not identified that as a risk, the project sponsor may provide additional funds
from contingency reserves to hire an outside consultant to train and advise
the
project staff in using the new [Link].
Contingency plans are predefined actions that the project team will take if
an identified risk event occurs. For example, if the project team knows that a
new release of a software package may not be available in time for them to
use
it for their project, they might have a contingency plan to use the existing,
older version of the software.
Fallback plans are developed for risks that have a high impact on meeting
project objectives, and are put into effect if attempts to reduce the risk are
not
effective. For example, a new college graduate might have a main plan and
A risk breakdown structure is a useful tool to help project managers consider
potential
risks in different categories. Similar in structure to a work breakdown
structure, a risk
breakdown structure is a hierarchy of potential risk categories for a
project.
Identifying risks is the process of understanding what potential events
might hurt or
enhance a particular project. It is important to identify potential risks early,
but you
must also continue to identify risks based on the changing project
environment.
Five common information-gathering techniques
include brainstorming, the Delphi technique, interviewing, root cause
analysis, and
SWOT analysis.
Brainstorming is a technique by which a group attempts to generate ideas
or find a
solution for a specific problem by amassing ideas spontaneously and without
judgment. This

approach can help the group create a comprehensive list of risks to address
later in the qualitative
and quantitative risk analysis processes.
An approach to gathering information that helps prevent some of the
negative group
affects found in brainstorming is the Delphi technique. The basic concept of
the Delphi
technique is to derive a consensus among a panel of experts who make
predictions about
future developments. Developed by the Rand Corporation for the U.S. Air
Force in the late
1960s, the Delphi technique is a systematic, interactive forecasting
procedure based on
independent and anonymous input regarding future events. The Delphi
technique uses
repeated rounds of questioning and written responses, including feedback to
earlier-round
responses, to take advantage of group input, while avoiding the biasing
effects possible in
oral panel deliberations. To use the Delphi technique, you must select a
panel of experts for
the particular area in question. For example, Cliff Branch from the opening
case could use
the Delphi technique to help him understand why his company is no longer
winning many
contracts. Cliff could assemble a panel of people with knowledge in his
business area. Each
expert would answer questions related to Cliff s scenario, and then Cliff or a
facilitator would
evaluate their responses, together with opinions and justifications, and
provide that feedback
to each expert in the next iteration. Cliff would continue this process until the
group
responses converge to a specific solution. If the responses diverge, the
facilitator of the Delphi
technique needs to determine if there is a problem with the process.
Interviewing is a fact-finding technique for collecting information in face-toface,
phone, e-mail, or instant-messaging discussions. Interviewing people with
similar project
experience is an important tool for identifying potential risks. For example, if
a new project
involves using a particular type of hardware or software, someone with
recent experience

with that hardware or software could describe problems he or she had on a

past project. If
someone has worked with a particular customer, he or she might provide
insight into potential
risks involved in working for that group again. It is important to be wellprepared for
leading interviews; it often helps to create a list of questions to use as a
guide during the
interview.
It is not uncommon for people to identify problems or opportunities without
really
understanding them. Before suggesting courses of action, it is important to
identify the root
cause of a problem or opportunity. Root cause analysis (discussed earlier
in Chapter 8,
Project Quality Management) often results in identifying even more potential
risks for a
project.
Another technique (described in Chapter 4, Project Integration Management)
is a
SWOT analysis of strengths, weaknesses, opportunities, and threats, which
is often used in
strategic planning. SWOT analysis can also be used during risk identification
by having project
teams focus on the broad perspectives of potential risks for particular
projects. For
example, before writing a particular proposal, Cliff Branch could have a group
of his employees
discuss in detail what their company s strengths are, what their weaknesses
are related
to that project, and what opportunities and threats exist. Do they know that
several competing
firms are much more likely to win a certain contract? Do they know that
winning a particular
contract will likely lead to future contracts and help expand their business?
Applying SWOT to specific potential projects can help identify the broad risks
and opportunities
that apply in that scenario.
Three other techniques for risk identification include the use of checklists,
analysis of
assumptions, and creation of diagrams.
A risk register is a document that contains

results of various risk management processes, often displayed in a table or

spreadsheet format.
It is a tool for documenting potential risk events and related information.
Risk events refer to specific, uncertain events that may occur to the
detriment or enhancement of the project.
The four basic response strategies for positive risks are:
Risk exploitation or doing whatever you can to make sure the positive risk
happens. For example, suppose Cliff s company funded a project to provide
new computer classrooms for a nearby school in need. They might select one
of their top project managers to organize news coverage of the project, write
a press release, or hold some other public event to ensure the project
produces
good public relations for the company, which could lead to more
business.
Risk sharing or allocating ownership of the risk to another party. Using the
same example of implementing new computer classrooms, the project
manager
could form a partnership with the school s principal, school board, or
parentteacher
organization to share responsibility for achieving good public relations
for the project. Or the company might partner with a local training firm that
agrees to provide free training for all of the teachers on how to use the new
computer classrooms.
Risk enhancement or changing the size of the opportunity by identifying
and
maximizing key drivers of the positive risk. For example, an important driver
of getting good public relations for the computer classrooms project might be
getting the students, parents, and teachers aware of and excited about the
project.
They could then do their own formal or informal advertising of the project
and Cliff s company, which in turn might interest other groups and could
generate
more business.
Risk acceptance also applies to positive risks when the project team
cannot
or chooses not to take any actions toward a risk. For example, the computer
classrooms project manager might just assume the project will result in good
public relations for their company without doing anything extra.
brainstorming a technique by which a group attempts to generate ideas
or find a solution for
a specific problem by amassing ideas spontaneously and without judgment
contingency allowances provisions held by the project sponsor or
organization to reduce the

risk of cost or schedule overruns to an acceptable level; also called

contingency reserves
contingency plans predefined actions that the project team will take if
an identified risk
event occurs
contingency reserves provisions held by the project sponsor or
organization to reduce the
risk of cost or schedule overruns to an acceptable level; also called
contingency
allowances
decision tree a diagramming analysis technique used to help select the
best course of action
in situations in which future outcomes are uncertain
Delphi technique an approach used to derive a consensus among a
panel of experts, to
make predictions about future developments
expected monetary value (EMV) the product of the risk event
probability and the risk
event s monetary value
fallback plans plans developed for risks that have a high impact on
meeting project
objectives, to be implemented if attempts to reduce the risk are not effective
flowcharts diagrams that show how various elements of a system relate
to each other
influence diagram diagram that represents decision problems by
displaying essential
elements, including decisions, uncertainties, and objectives, and how they
influence each
other
interviewing a fact-finding technique that is normally done face-to-face,
but can also occur
through phone calls, e-mail, or instant messaging
known risks risks that the project team have identified and analyzed and
can be managed
proactively
Monte Carlo analysis a risk quantification technique that simulates a
model s outcome many
times, to provide a statistical distribution of the calculated results
probability/impact matrix or chart a matrix or chart that lists the
relative probability of a risk
occurring on one side of a matrix or axis on a chart and the relative impact of
the risk
occurring on the other
residual risks risks that remain after all of the response strategies have
been implemented

risk an uncertainty that can have a negative or positive effect on meeting

project objectives
risk acceptance accepting the consequences should a risk occur
risk-averse having a low tolerance for risk
risk avoidance eliminating a specific threat or risk, usually by eliminating
its causes
risk breakdown structure a hierarchy of potential risk categories for a
project
risk enhancement changing the size of an opportunity by identifying and
maximizing key
drivers of the positive risk
risk events specific uncertain events that may occur to the detriment or
enhancement of the
project
risk exploitation doing whatever you can to make sure the positive risk
happens
risk factors numbers that represent overall risk of specific events, given
their probability of
occurring and the consequence to the project if they do occur
risk management plan a plan that documents the procedures for
managing risk throughout a
project
risk mitigation reducing the impact of a risk event by reducing the
probability of its occurrence
risk-neutral a balance between risk and payoff
risk owner the person who will take responsibility for a risk and its
associated response
strategies and tasks
risk register a document that contains results of various risk
management processes, often
displayed in a table or spreadsheet format
risk-seeking having a high tolerance for risk
risk sharing allocating ownership of the risk to another party
risk tolerance the amount of satisfaction or pleasure received from a
potential payoff; also
called risk utility
risk transference shifting the consequence of a risk and responsibility
for its management to
a third party
risk utility the amount of satisfaction or pleasure received from a
potential payoff; also called
risk tolerance
runaway projects projects that have significant cost or schedule
overruns
secondary risks risks that are a direct result of implementing a risk
response

sensitivity analysis a technique used to show the effects of changing

one or more variables on an outcome