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1. RISK MANAGEMENT
STAKEHOLDERS &
COMMUNICATION

2. Objectives
After completing this lesson, you will be able to:
 Explain individual and overall project risk
 Identify stakeholder risk attitudes
 Explain iterative process
 Define communication
 Describe responsibility for Project Risk Management
 Recognize the role of project manager

3. Individual and Overall Project Risks
The project risk is an uncertain event or a condition that has a positive or a negative effect on the
project objectives. Project risk is classified into two levels:
1. Individual risk
2. Overall project risk
Understanding individual risk helps in overcoming the project-related risks and increases the
probability of project success.
The overall project risk represents the effect of uncertainty on the project as a whole.
The assessment of project risk helps in decision-making at strategic level and in turn at program,
portfolio, and project governance levels to decide priorities.

4. Stakeholders
 Stakeholders are entities who have interests in your project, such as the project team,
sponsor, the public, governmental authorities, the client, subcontractor, etc. The project
sponsor is one of the most important stakeholders, because the sponsor is the one who
provides the financial resources.
 Stakeholders can affect the project and the project can affect them as well. These
effects can be positive or negative.
 The project team is responsible for identifying the stakeholders and their requirements.
Stakeholders too have responsibilities; the most important of which are to participate in
the project meetings and communicate their concerns in a timely manner.

5. How NOT to go Wrong with Stakeholders?
Be active not reactive (you invite them, call them and reach out to them)
You need to identify them
Rank their level of power and interest to influence the project
Collect their requirements
Invite them to participate in meetings, brainstorming sessions, etc.
Give attention to them and incorporate their requirements in line with project
objectives

6. How NOT to go Wrong with Stakeholders?
Make sure that you include them in the communication plan and share information
with them
Look into their issues (don’t ignore them)
Adopt a “win-win” strategy
Understand that they have different interests and what might be important to one
might be trivial to another

7. Stakeholder Risk Attitudes
It is important for a project or a risk manager to understand stakeholders’ risk
attitudes. The risk attitudes of the project stakeholders determine the extent to which
an individual risk or overall project risk matters.
It usually result in a desire for increased certainty in project outcomes and it may
express a preference for one project objective over the other. Understanding
stakeholders’ attitudes towards risk is an important component of risk management
planning.
The priority of the risk depends upon the risk attitudes and
tolerance levels of the stakeholders.

8. Stakeholder Risk Attitudes
• Stakeholders are risk seeking in nature.
Risk seeker
• Stakeholders are neither risk averse nor risk seeking.
Risk neutral
• Stakeholders who does not take risks.
Risk averse

9. Communication
Communication is essential while conducting Project Risk Management. Important
points to be kept in mind to make the risk management informative or to create
awareness are as follows:
 Project Risk Management cannot be conducted in siloes.
 Risk identification and analysis depends on stakeholders’ input.
 Effective and honest communication among the stakeholders.
 The result of the communication should meet the need of each stakeholder as
well as the overall project objectives.

10. Communication….
To have effective communication in your project, you need a plan called a
‘communication plan’. This plan will include what will be communicated, to whom it
will be communicated and when it will be communicated.
Communication is the process of sending information between two or more people.
Communication is quite often infected with misunderstandings. Let’s draw a
communication model and see the possible causes of misunderstandings. The
model consists of:

11. Communication …
Sender
• The person initiating the communication by sending a message
Receiver
• The person or people receiving the message
Message
• Usually verbal, but can also be in the form of signs and gestures or be written
Medium
• The way a message is being sent and with what technology (e.g. voice, picture,
advertisement, phone, internet, etc.)

12. Communication Methods
These methods are:
Interactive Method
• This is the best way to
communicate because both
parties are sending and
receiving information, thus
allowing opportunities for
clarification. Interactive
communication is usually
done face-to-face but also
can be done via video
conferencing and
telephones.
Pull Method
• The project manager makes all
information available and
accessible in a designated
resource center or venue and
the stakeholder(s) “pull” the
data as needed. For example,
the project manager might make
the information available via a
server or a secretariat. Can you
think of risks associated with
this method? Will all
stakeholders be motivated to
make the effort to get the
information?
Push Method
• This is the opposite of the pull
method. In this method, the
project team pushes (sends)
information onto the
stakeholders. This is often done
via email attachments and
memos. Here, you have the risk
of information being lost in
transition; however, you can
make a system to track delivery.

13. Manage Communications is the process of
creating, collecting, distributing, storing, retrieving,
and the ultimate disposition of project information
in accordance to the communications
management plan. The key benefit of this process
is that it enables an efficient and effective
communications flow between project
stakeholders
Definition
Communication …

14.  It also provides opportunities for stakeholders to
make requests for further information,
clarification, and discussion. Techniques and
considerations for effective communications
management include, but are not limited to, the
following:
 1. Sender-receiver models. Incorporating feedback
loops to provide opportunities for interaction/
participation and remove barriers to communication.
Overview

15.  2. Choice of media. Situation specifics as to when to communicate in writing versus
orally, when to prepare an informal memo versus a formal report, and when to
communicate face to face versus by e-mail.
 3. Writing style. Appropriate use of active versus passive voice, sentence structure,
and word choice.
 4. Meeting management techniques. Preparing an agenda and dealing with conflicts.
 5. Presentation techniques. Awareness of the impact of body language and design of
visual aids.
 6. Facilitation techniques. Building consensus and overcoming obstacles.
 7. Listening techniques. Listening actively (acknowledging, clarifying, and confirming
understanding) and removal of barriers that adversely affect comprehension.

16. Communication…
Project managers spend the majority of their time to communicate.
 Some potential dimensions of communication activity:
Internal – external
Formal – informal
Vertical – horizontal
Official – unofficial
Written – oral
Verbal –non-verbal

17. Communication…
Oral/Verbal
Personal contact
Group meetings (presentations, teleconferencing)
Telephone
Audio
Non-Verbal
Body language
Charts and graphs
Written
Correspondence (letters / memos / reports / emails)

18. The Project
Sponsor, Functional Managers
And Team Members
Other Stakeholders
Other ProjectsOther Project
Managers
10.1 Plan Communication: Tools & Techniques
Who needs project information?

19.  Communication network models have been devised to try to explain the relationships between
people and the number or type of interactions needed between project participants.
 What you need to know is that network models consist of nodes with lines connecting the
nodes that indicate the number of communication channels, also known as lines of
communication.
10.1 Plan Communication: Tools & Techniques
Communication Channels

20.  Communication channels grow at a greater than a linear rate and are represented by the
following formula:
 Example: If a team of 6 people adds two more persons, how may more communication
channels are there?
(6X5)/2 = 15 and (8X7)/2 = 28 so the answer is 28-15 = 13
10.1 Plan Communication: Tools & Techniques
Communication Channels..
N (N-1)/2 where N equals the number of people

21.  Includes communicating in all directions
 Determine and limit who will communicate with
whom and who will receive what information.
Customer, sponsor, Functional
managers, and Team Members
Other
Project
Managers
Other
Projects
Other
Stakeholders
The
Project
2
)1( NN
• Consider the number of potential
communication channels or paths
• Formula:
Communication Requirement Analysis

22. Communication Method When Used
Formal Written
Complex problems, project plans, project charter,
communicating over long distance, contract
Formal Verbal Presentations, speeches, negotiations
Informal Written Memos, e-mail, notes
Informal Verbal
Meetings, conversations, initial conversations about
performance
 To have clear, concise communications, the project manager must handle communications in a
structured manner by selecting the form of communication that is best for the situation.
 Communications occur internal and external to the core project team and vertical and horizontal
within the organization.
 A decision regarding whether the communication needs to be formal or informal, written or verbal,
needs to be made for each instance of communication.
Additional Notes

23. Communication Methods Exercise
Situation Method Used
1. Memos………………………….…….. Informal Written
2. Project Plans…………………………. Formal Written
5. Presentations…………………………. Formal Verbal
3. Communicating over long distance… Formal Written
6. Conversations………………………… Informal Verbal
7. Complex Problems.………………….. Formal Written
4. Meetings………………………………. Informal Verbal
Informal Written8. E-mail…………….…………………….
Formal Written11. Project Charter.………………………
Informal Written9. Notes……………..…………………….
Formal Verbal10. Speeches.………………………….…

24. Responsibility for Project Risk Management
 Since project risks can affect project objectives, anyone with an interest in achieving
those objectives should play a role in Project Risk Management. Some of the
responsibilities for Project Risk Management are as follows:
 Project Risk Management should be an integral part of all the other project
knowledge areas.
 Roles and responsibilities like owner, should be clearly identified and
communicated.
 RACI model can be used to define the roles and responsibility.

25. Responsibility for Project Risk Management (cont.)
R: Responsibility
A: Accountability
C: Consult
I: Inform

26. Role of Project Manager
Project
Manager
Develop and
Approve
Project
Management
Plan
Facilitate open
and honest
communication
Audit Risk
Responses
Document
Lesson
Learned
Escalate Risk
that go
beyond
tolerance
Oversee
project risks
by team
members
Determine
acceptable
level of risks
Promote risk
management
processes
Participate in
all risk
management
processes
Monitor
efficiency and
effectiveness
of risk
processes
Regular
reporting of
risks statuses
Approve risk
responses
Apply
contingency
funds
Encourage
Senior
Management
Support

27. Iterative Process
 Risk management is not a one-time activity.
Some important pointers, which must be kept
in mind when discussing the iterative
processes of risk management are as
follows:
 Risk identification is repeated throughout the
project life cycle.
 Periodicity should be determined.
 Risk identification can be repeated at a key
milestone or when there is a change in the
project or its operating environment.
.
.
.
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