Controlling a stage III: issues, risks, corrective action and escalation

No stage goes exactly to plan. Suppliers miss dates, tests fail, people fall ill, stakeholders ask for more, and risks occur. Three activities of controlling a stage deal with this. Capturing and examining issues and risks makes sure every new problem or uncertainty is recorded and understood. Taking corrective action fixes problems that can be fixed within the project manager's authority and the stage tolerances. Escalating issues and risks passes upward the ones that cannot. PRIN-131 covered the issues and risk practices in depth; this lesson focuses on how the project manager uses them inside controlling a stage, continuing with Ridgeline Water's pilot stage from week 30 to week 36.

Capturing and examining issues and risks

Anyone involved in the project can raise an issue or a risk at any time: a team manager, a board member, a customer, an inspector. The project manager first decides how to handle it. Small matters that can be dealt with informally go in the daily log. Matters that need formal handling go in the issue register or the risk register, with an issue report or a risk assessment where the issue management or risk management approach requires one. The examination asks what the matter is, what caused it, what its effect is on the stage and project plans, the business case and the risks, and what the options are.

The project manager's examination is not just a technical assessment. It always comes back to the tolerances and the business case. A problem that costs 5 thousand to fix is trivial if the stage has 31 thousand of cost tolerance left and nothing else is threatened. The same problem matters a great deal if the stage is already forecasting a breach. An opportunity to save money is worth pursuing only if it does not damage quality or benefits.

Taking corrective action

If a problem can be resolved within the stage tolerances and within the project manager's delegated authority, the project manager takes corrective action. That might mean moving resources between work packages, adjusting a work package and its tolerances, approving a change within the change authority the board delegated, re-sequencing work, or asking a team manager for a recovery plan. Corrective action is recorded: the issue register shows the decision, the stage plan is updated, affected work packages are revised and the registers are updated. The board sees the action in the next highlight report.

At week 33 the backflow valve delay became real. Northline Metering could not fit valves to 140 meters in older streets until the valves arrived, six weeks later, which would push those installations past the end of the stage. The project manager examined the options. The valves were needed only at locations with an older service connection, so the installers could fit the meters now with a temporary approved fitting and return to fit the valve later, at an extra cost of about 11 thousand. The board had delegated a stage change budget of 50 thousand to the project manager, with a rule that any single change above 10 thousand is reported to the board in the next highlight report. The project manager authorized the re-sequencing at once, since it cost nothing, approved the 11 thousand for the return visits from the change budget, and flagged it in the next highlight report as the rule required.

Escalating issues and risks

When an issue or risk cannot be dealt with inside the stage tolerances and the project manager's authority, the project manager escalates it. There are two routes. If a forecast shows a stage tolerance will be breached, the project manager sends an exception report to the board; lesson 9 covers exceptions in detail. If no tolerance is forecast to be breached but the matter needs a decision the project manager is not allowed to make, such as a change above the delegated change authority, the project manager sends an issue report to the board and asks for direction. The board responds through giving ad hoc direction in directing a project.

The council's request to add 200 connections at the seniors' housing complex is a good example of the second route. The examination showed the extra connections would cost about 64 thousand and add one week, which would still be within the stage time tolerance but would use more than the stage's change budget and is far above the project manager's per-change authority. The connections would also give useful data on older plumbing for rollout. The project manager sent an issue report to the board with three options: approve the change from the project-level change budget, defer the complex to rollout stage 1, or reject it. The board chose to defer it to rollout stage 1, where it would cost less because crews would already be working nearby, and asked for the decision to be reflected in the next stage plan.

How the routing works in code

The code below applies the routing rules to the four issues raised in the pilot stage between weeks 30 and 36. It checks each against the stage tolerances, the per-change authority and the remaining change budget.

limits = {"cost": 1568 * 1.02, "end_week": 39, "min_scope": 2750}
forecast = {"cost": 1560, "end_week": 38, "scope": 2800}
per_change, change_budget_left = 10, 50
issues = [  # name, cost, weeks added, scope change, change_needed
    ("wrong billing rates (rework)", 3, 0, 0, False),
    ("backflow valves: temporary fittings", 11, 0, 0, True),
    ("seniors' complex +200 connections", 64, 1, 200, True),
    ("crew illness recovery overtime", 4, 0, 0, False),
]
for name, cost, wk, sc, change in issues:
    c, w, s = forecast["cost"] + cost, forecast["end_week"] + wk, forecast["scope"] + sc
    if c > limits["cost"] or w > limits["end_week"] or s < limits["min_scope"]:
        route = "exception report to the board"
    elif change and cost > change_budget_left:
        route = "issue report to the board (beyond delegated change budget)"
    elif change and cost > per_change:
        route = "approve from change budget; report to board in highlight"
        change_budget_left -= cost
    else:
        route = "corrective action by the project manager"
    if "board" not in route or "highlight" in route:
        forecast["cost"] = c
    print(f"{name:38} -> {route}")
print(f"stage cost forecast {forecast['cost']}k; change budget left {change_budget_left}k")

wrong billing rates (rework)           -> corrective action by the project manager
backflow valves: temporary fittings    -> approve from change budget; report to board in highlight
seniors' complex +200 connections      -> exception report to the board
crew illness recovery overtime         -> corrective action by the project manager
stage cost forecast 1578k; change budget left 39k

Three of the four issues are handled inside the stage. The seniors' complex would breach the stage cost tolerance if added in full, so in the code it routes to an exception report; in practice the project manager avoided that by asking the board for direction early, before treating it as part of the stage, and the board deferred it. The point is the same either way: the decision belonged to the board, not to the project manager. After the other three issues, the stage cost forecast is 1,578 thousand, within the 1,599 thousand limit.

Risks during the stage

Risk management continues throughout the stage. The project manager reviews the risk register as part of each stage status review, checks that risk owners are carrying out the agreed responses, and watches for risks that have occurred and become issues. At week 34 the frost risk to meter pits in the eastern streets rose sharply when the long-range forecast predicted an early cold spell. The response was already planned: insulated pit lids, held in stock as a fallback. The risk owner triggered it, the cost of 4 thousand came from the risk budget, and the risk register and highlight report recorded the action. No escalation was needed, because the risk budget existed precisely for this.

Ridgeline Water's frost risk response reflects the local frost depth that the state plumbing code and the city's water service standards use when setting service line and meter pit depths. Older pits in the eastern streets were built to an earlier standard, which is why they are more exposed.

Recording what was decided

Every examination and decision should leave a trail. The issue register shows the issue, its type, its priority and severity, the decision and who made it. The daily log records informal actions. The stage plan, work packages and product records are updated for approved changes. The lessons log captures anything that should be done differently next time, such as checking component lead times before the stage starts. That trail is what allows the project manager to write an honest end stage report, and it is what an auditor or a successor project manager will rely on.