Understanding the RIP ripple effect

The terms “risks,” “issues,” and “problems” may seem interchangeable to those new to project environments, yet seasoned project sponsors and project teams know their unique roles. What might be less discussed is the ripple effect that links these elements together, creating patterns that can derail projects when left unchecked.

To tackle projects effectively, especially in transformation or high-stakes scenarios, understanding the interdependencies of risks, issues, and problems (RIP) and acting on them can make all the difference between smooth delivery and costly disruptions.

The Fundamental Distinctions

Risks are potential future events that may impact project objectives if they occur. They are uncertainties that might (or might not) happen, and they need to be identified, assessed, and managed to prevent negative outcomes.

Issues are risks that have materialised; they are events or circumstances that are currently impacting the project. Issues typically require immediate action to reduce their effect on project goals.

Problems can be seen as recurrent or systemic issues. While issues may arise sporadically, problems often indicate deeper underlying challenges that continuously affect the project or organisation.

Each of these is interconnected: unmanaged risks increase the likelihood of issues, and unresolved issues often lead to ongoing problems.

The Ripple Effect

When risks, issues, and problems aren’t managed effectively, they create a ripple effect. In a recent study from the Project Management Institute (PMI), 41% of failed projects attributed their failure to a lack of risk management.

Here’s how these project elements impact one another:

1.Risks with Low Visibility

Projects frequently involve unknowns, and unmitigated risks can start out small but grow into critical issues. Imagine a technology project where the risk of system incompatibility was initially low but became significant when integration challenges began to affect the overall timeline. When these risks evolve unchecked, they increase the likelihood of issues that can quickly multiply across the project, derailing progress and outcomes.

2.Issues Becoming Problems

Project issues can also become systemic if they reoccur without resolution, thus turning into problems. For example, if team communication is frequently interrupted due to a lack of clear roles or inconsistent meeting schedules, this issue may eventually become a significant problem, leading to confusion, missed deadlines, and inefficiencies in execution.

3.Compounding Complexity

A report from McKinsey found that, on average, large IT projects run 45% over budget and 7% over time, with risks, issues, and problems each contributing to these figures. The compounding effect occurs when each unaddressed issue amplifies subsequent ones, leading to a “death by a thousand cuts” scenario. The combination of cascading small issues can create overwhelming complexity, which transforms manageable projects into chaotic ones.

A Project Gone Off-Track

Consider a manufacturing company undergoing a digital transformation to automate key processes. At the start, the project sponsor identified several risks, including the potential for software incompatibility, employee resistance, and potential data security issues. These risks were logged, but due to the team’s optimistic outlook and lack of prior experience with digital transformations, they weren’t rigorously tracked or mitigated.

Months into the project, some of these risks materialised into issues. The software incompatibility that was flagged as “low likelihood” became an issue when the IT team discovered the new software couldn’t integrate with existing systems. Because no mitigation plan was in place, the team had to pivot, consuming time and resources that were meant for other tasks. This led to further delays, team frustration, and overtime work, escalating costs and hurting morale.

Eventually, the project reached a point where issues had become entrenched problems. The workforce resisted adopting the new processes due to a lack of early-stage training, resulting in lost productivity. Additionally, with the existing systems still partially in place, data silos developed, making it difficult to access consistent, real-time information. The project went significantly over budget and behind schedule, impacting the company’s bottom line and future investment potential.

Had the team invested more in early risk mitigation and had mechanisms in place to address issues before they spiralled into problems, the outcome could have been vastly different.

• PMI’s Pulse of the Profession report highlighted that, on average, organisations lose $122 million for every $1 billion invested in projects due to poor performance. Much of this cost is attributed to unforeseen risks and unmanaged issues.
• Research by KPMG found that 70% of organisations have experienced at least one project failure within the last 12 months. In many cases, these failures stemmed from inadequate risk management processes, which allowed small issues to snowball into problems with far-reaching consequences.
• According to Gartner, 30% of project delays are due to reoccurring issues related to communication and alignment. These issues, if left unaddressed, often lead to more significant problems, resulting in extended timelines and higher costs.

Strategies to Break the Cycle

While risks, issues, and problems are an inevitable part of project management, the cycle can be broken with proactive strategies.

1.Risk Identification and Regular Review

Encourage early risk identification with all team members, not just the project sponsor. Risks should be documented with clear mitigation strategies and reviewed regularly. This ongoing evaluation can reduce the likelihood of risks turning into issues.

2.Establish a Culture of Accountability

Implementing regular issue-resolution meetings can help maintain team accountability. Teams should be encouraged to address issues as they arise rather than letting them fester and transform into more significant problems.

3.Invest in Root Cause Analysis

When issues arise, teams should not only fix the immediate problem but dig deeper to understand the root cause. Techniques like the “5 Whys” can be useful for uncovering underlying issues. Root cause analysis not only addresses symptoms but also prevents recurrence, ultimately reducing the number of issues that escalate into problems.

4.Incorporate Lessons Learned for Continuous Improvement

After each project phase or at its completion, conduct a “lessons learned” session to discuss risks, issues, and problems encountered. This can build a repository of knowledge that future projects can draw on to avoid similar pitfalls.

Project management will always involve risks, issues, and problems. However, by shifting the focus from reactive problem-solving to proactive risk mitigation and thorough issue resolution, organisations can minimise the ripple effect that so often undermines project success. Creating a proactive culture that values risk identification, issue resolution, and root cause analysis can significantly improve project outcomes and reduce the rate of recurring problems.

Every project is an opportunity to refine these skills and build a legacy of efficient, effective project delivery – where risks are addressed early, issues are resolved swiftly, and the cycle of problems is finally broken.

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In my book – Real Project Leadership – I share pillar #2 Solution Leadership.

Solution leadership revolves around the ability to navigate through challenges and uncertainties to deliver viable solutions. This involves five key ingredients: critical thinking to analyse situations, innovation to design novel approaches, adaptability to pivot as needed, problem solving to address issues, and risk management to mitigate potential setbacks.

Does your team need help with solution leadership? Book a call with me.