Risk vs Issue: What’s the Difference?
Why does the difference between a risk and an issue in a project matter? A good project manager knows the role of project risk and project issue to manage impact and response for the project.
On this page:
- What is a Risk in project management?
- What are the types of project risk?
- Importance of understanding Risk in projects
- What is an Issue in project management?
- What are the types of issues?
- Importance of understanding Issues in projects
- How Risk and Issues connect within a project
- Difference between risk and issue
- Similarities between Risk and Issue
What is a Risk in project management?
All projects have a degree of inherent uncertainty. When an uncertain event or change occurs, risk management is how (or if) the project is prepared for it. Project Management Institute (PMI®) defines project risk as “An uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives.”
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What are the types of project risk?
As part of risk management, the project manager will organize the risks identified by the project team into types to analyze those of a similar nature.
Technical risks are connected to technology, including, but not limited to, software, hardware, digital network, digital assets, system security, and new and changing technology and regulatory requirements.
External risks exist outside of the project’s organization. They most likely are beyond the project manager’s or teams’ control, such as political, governmental, climate, or economic changes.
Projects occur within an organization (e.g. team, department, division, company). The organization behind the project, be it a sole proprietor or a global interdepartmental collaboration, will have change as part of day-to-day business activities.
Project Management Risks
Project risk includes the work of managing the project. It includes project management work and tasks within communication, estimating, planning, contract development, and scoping.
Importance of understanding Risk in projects
Risk has the potential for positive or negative impact. In other words, the risk is only sometimes avoided for a project because it is not always inherently negative. Within some projects, risks can be desired for the potential benefits.
For example, the cost of a required technology or material decreases within the project, thus saving the budget. That is a positive risk. Another example is that a subject matter expert becomes suddenly unavailable; therefore, time and budget are spent on a replacement, causing delays in the project timeline. That is an adverse risk.
Within risk management, the project manager works with the project team to identify, document, and track risks for the project. Additionally, risks of higher impact and/or higher probability should have an associated mitigation strategy ready in case they do occur. There is always change in a project, but a project manager who understands risk can better plan for a risk event, manage the potential impact of a risk if it occurs, and lead the project team to activate the risk mitigation plan to keep the project moving.
What is an Issue in project management?
Your technology lead from the project team is scheduled to present progress to the client this morning at 9 am. At 8:15 am, you receive a text message from your technology lead that they have had to take their child to the doctor unexpectedly. You now have an issue. You did not know this would happen, and now you have 45 minutes to find a solution.
In a project or business sense, an issue is an unexpected event happening in the present moment with a potential negative impact on reaching goals. It is not an event in the future or one that may occur like a risk; it is happening right now or just happened with immediate impact.
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What are the types of issues?
There are seemingly endless issues that can happen, of all sizes, in any project. For example, you become stuck in traffic due to construction or an accident which will make you late getting to the office for an important stakeholder meeting. You have an issue if you work remotely, and your internet service goes down without warning. Not all those issues merit complete documentation for a project! However, understanding “issue” as a concept within project management and leading the team through issues when they occur can reduce the negative impact on the project and increase the potential for positive outcomes.
Project team member communication issues
With any combination of people, there is the potential of misunderstandings, conflict, competition, and communication gaps. People skills, specifically emotional intelligence and clear behavioral expectations can help with these issues.
Outside of the project (external) issues
No project exists only within a business. For example, a weather event can be an issue for a project – power loss, residence or business building damage, delayed resource shipment, or more. Likewise, change outside of the project can lead to an issue for the project.
Issues can combine and impact the overall project timeline. For example, when a project team member unexpectedly needs to take medical leave, the project has an issue due to the need to find someone with the appropriate skills to continue the work in their stead. In addition, delays, extensions, or inaccurate time estimates all lead to time issues for the project.
Importance of understanding Issues in projects
An issue can cause an entire project to go on hold. Does that seem unlikely? It is not only possible but occurred in many ways across the globe at the height of the Covid-19 pandemic, for example. Cloud services could not keep up with the immediate and astronomically high demands; specific service industries and manufacturing facilities needed staff faster to meet sky-rocketing customer demands. Those are all issues; they were very unexpected, and solutions were immediately needed to ensure the project could continue.
How Risk and Issues connect within a project
How an issue is addressed connects to the effectiveness of the project’s risk management practices and planning. Ignoring an issue does not mean it will magically fizzle out and you can continue the project as planned; with no effort to solve the issue, it can blossom into multiple risks for the project, all with negative impacts.
When an identified risk occurs, it becomes an issue. In the project lessons learned work, every risk that became an issue should be noted for future project planning. For the project issue that is not connected to an identified risk, there is still something to be learned for future project planning – what was the root of the issue, when did it occur within the project, and could it have been prevented or reduced if it had been part of the risk management work.
Proactive and preventive risk management is the strongest defense against an issue having a significant negative impact on a project.
Difference between risk and issue
While risk and issue have a definite connection, there are also differences. Of note:
- A risk can be either positive or negative; an issue is only negative.
- A risk may or may not occur in the future; an issue is happening now.
- A high-impact risk has a mitigation plan for the future; an issue needs immediate action to reduce negative impact.
- Risks are documented in the risk Register for what could happen; Issues are recorded in the Issue Log for what is or did happen.
- Risks have a probability of occurrence rating; issues do not because they did happen or are occurring.
- Risks have a mitigation plan to influence the likelihood of occurrence; issues do not as they happen.
The most important part of “risk vs. issue” is time orientation: risk management is about looking ahead and preparing for the unknown but possible, and issue work is the response to what is impacting the project in the current moment and was not expected.
Similarities between Risk and Issue
While there is a “risk vs. issue” aspect of project management, there are also similarities between the risk and issue components.
- There are many types of risks and issues in any project.
- Not all projects of the same kind will have the same risk or experience the same issue.
- Lessons learned from similar projects can be incredibly helpful in planning for risk or responding to an issue.
- The project team works with the project manager to identify risk, conduct risk management activities, and determine the needed action when an issue occurs.
- There is project risk documentation and project issue documentation.
- The scope and type of either risk or issue can change through the course of a project.
- The project manager must lead the team through change, risk events, and issue response activities.
The most crucial part of understanding risk and issue in terms of similarity is that both are part of project management for any project.
A project manager who understands the role, difference, and similarity between risk and issue will manage his or her work more effectively, even in times of change or unexpected events. A risk is a possibility, and depending on the potential impact, there will be a corresponding mitigation plan to use in the future if needed. An issue can come from a risk, but that is not always the case and is an event or change necessitating immediate action as it is happening or has happened. The project manager needs to consider “if this happened, then what could be the impact?” for risk and “this happened, how do we respond” for the issue. All risk and issue work should be documented in project management efforts.
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