Situational awareness is key to managing risk?

by Dr. Glen Jones

Situational awareness for managing risk is essential. Like safety and quality, risk management is a state of mind with forethought. It cannot be simply boiled down into a set of tools and techniques. There are tools and techniques involved, but to be truly effective at risk management requires a trained mind — a situational awareness. The mind needs to focus on the what-ifs and how to address them and focus on situational awareness. Interested in finding out about situational awareness for managing risk? Read further for more and an example of situational awareness for context.


The situationally aware project manager

Similar to driving a car or flying a plane, being situationally aware helps to identify potential risk points. Here’s an example of situational awareness. When you are behind the wheel of your car, you are looking more cautiously at intersections for where someone could pull out in front of you. When driving in the woods, you respond to the deer crossing sign by watching the shoulders and tree lines for the creatures. In the same light, a situationally aware project manager will be thinking through the project to identify where will the delays initiate, where will the additional costs originate.


Situational Awareness For Managing Risks

When risks are identified by the situationally aware project team, the next step is to identify a response to the risk. If the engine of the plane cuts out, what response does the pilot perform? A trained pilot is always looking for the next safe landing area for this very situation. What if another aircraft suddenly appears in the area? The trained pilot will steer towards the open air or turn right if the other plain is directly ahead. These are already predefined before the pilot enters the situation. Likewise, project team members should train their minds to prepare a response to perceived risks to the project.

So, how does a project manager or team member become situationally aware? The response is to train the mind. Training the mind to be situationally aware is not difficult, but requires effort over a period of time. This is where risk management tools and techniques come in handy. A daily solo brainstorming session can help you to renew your attention to be situationally aware.

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Think about the last time you were in a risk management session with your project team. Picture the team sitting around the table, staring at each other trying to come up with a new risk. Remember the same list of risks that is presented in every project and every session. This brainstorming session is a focused effort to identify risks, but risks do not occur in a static environment. The project is an ever-changing landscape. Every decision and every event creates a new picture of the project for the risks to jump out at you. This dynamic environment is why project managers struggle with risk management. Therefore, constant vigilance must be developed and maintained.

Being situationally aware requires you to understand the current situation of the project and what will come next. This requires a significant amount of data. The pilot has navigation systems, instruments, weather reports, and eyes on the skies. This all brings information to the pilot to know what the current situation is. The flight plan identifies where the plane is to go next.

Similarly, the project team needs to be up to date on the status of the project: the current cost report, what has been completed, what resources are available, the contract terms, weather (if the project can be affected), labor market, business impacts. All of these sources of data will provide a picture of today’s project environment. The updated project schedule and plans will tell the project team where the project is going. Your risk register supports your memory of your risks and plans and becomes your communications tool to other team members and stakeholders.

It is critical to review the status of the project frequently to maintain your awareness of the current environment. It is also critical to regularly review the updated schedules and plans to be aware of the next steps of the project journey. Then hold a solo brainstorming session to identify where the risk points are that are imminent. Where is the next intersection? What would my reaction be? Document your analysis in the risk register so team members can respond accordingly.

Risk management is more than a set of tools and techniques. Risk management is about becoming situationally aware. Each team member needs to begin to understand the status of the project and how it is planned to proceed while looking for things that could impact it. Like safety and quality, risk management needs to be a state of mind that becomes ingrained in the organization’s culture. Then, we can truly say we are managing the risks on our projects.


What is situational awareness?

Situational awareness is the ability to understand the current environment and anticipate what is likely to happen in the near future.

Why is situational awareness important for managing risk?

Situational awareness is important for managing risk because it allows individuals and teams to identify potential risks and take appropriate action to mitigate or avoid them.

How can you develop situational awareness?

Situational awareness can be developed by regularly reviewing the status of a project, staying up-to-date on relevant data, and holding solo brainstorming sessions to identify potential risks.

What are some situational awareness examples in action?

Examples of situational awareness in action include a pilot identifying a safe landing area in case of an engine failure, a driver watching for potential hazards on the road, and a project manager anticipating delays or cost overruns.

What role do risk management tools and techniques play in situational awareness?

Risk management tools and techniques can be helpful in developing situational awareness by providing a structured approach to identifying and addressing potential risks. However, they should not be relied on solely and should be integrated into a broader mindset of situational awareness.


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What is a Stakeholder?

According to the PMI Guide to Business Analysis, “A stakeholder is an individual, group, or organization who may affect, be affected by or perceive itself to be affected by a decision, activity, or outcome of a project, program or portfolio.” Stakeholders can be internal or external to the project and include the project sponsor, project team, customers, and suppliers. If certain stakeholders are not managed effectively during a project, there is a risk that it may be stopped. Stakeholder Engagement is defined as ”the process by which an organization involves people who may be affected by the decisions it makes or can influence the implementation of its decisions.” The following three steps can be implemented during business analysis initiatives on a project to maintain positive stakeholder engagement.

Step 1: Identify stakeholders

Identifying stakeholders is a process of identifying all affected people or organizations throughout the project life cycle and documenting information regarding their interests, independencies, influence, and the potential impact on project success. It involves determining who is impacted by the project, what their interests are, whether the stakeholders are internal or externals and who are the most important ones. It also involves the use of tools such as brainstorming, expert judgment, and documentation review as well as lessons learned from previous, similar projects to identify who are the project stakeholders. The output of the process is a Stakeholder Register which identifies the people, groups, and organizations that have any interest or involvement in the project and includes names, titles, roles, interests, power, requirements, expectations, and type of influence, etc. The involvement of stakeholders on a project may include sponsorship of the project, confirmation of business requirements, approval of project documents, and testing of the deliverables.

Step 2: Analyze stakeholders

The next step is to put together a detailed stakeholder analysis with the team that is involved in the project. Stakeholder analysis is used to identify key stakeholders and to assess interests, positions, alliances, and importance given to the project by the stakeholders. Such knowledge allows business analysts to interact more effectively with stakeholders and to obtain their support. Conducting such an analysis before the project starts, “allows project managers to detect and take measures to avoid misunderstandings and potential opposition to the project” (Bright Hub Project Management). It’s important to identify and examine key factors such as proximity to the project, demographics, interest in the project, needs and concerns, expectations of the project, and any previous project communications. Stakeholder’s interests can be used further, criteria such as whether they are resistant, neutral, and supportive with respect to the initiative. The Power/Interest Grid shown below is a simple tool that helps to categorize project stakeholders based on their increased power and interest in the project and helps to focus on the stakeholders who can make or break the project thereby prioritizing the stakeholders e.g., stakeholders that lie in the Manage Closely quadrant can contribute towards project failure if they are not managed properly during the project.

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Step 3: Manage stakeholder expectations

It is also important to plan for stakeholder engagement upfront by articulating management strategies to engage them. Different stakeholders have different opinions as to how the project will benefit them; hence it is important to understand and document those expectations. It is therefore important to meet the stakeholders regularly and update them on the progress of the project. Effective communication ensures that stakeholders receive information that is relevant to their needs and builds positive attitudes towards the project. Investment in careful planning before engaging stakeholders will, therefore, bring significant benefits in the future.

The communications management plan can be used to define the communication requirements for the project, how information will be distributed, the frequency of distribution, the level of details and format, and who is responsible for communicating with stakeholders. Communicating with the stakeholders early and often and including reporting on progress will ensure that they fully understand the initiatives and the benefits; hence they can be more actively supportive in the future.

Other important documents such as the Issue Log can also be used to record and manage and communicate on all the issues related to the project.

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