Risk perception and risk management: the eFinLit European project case

Anabela MesquitaPolytechnic of Porto / ISCAP- CICE andAlgoritmi RCsarmento@iscap.ipp.pt

Agenda•Introduction•Background•The project•Measures to assess and prevent risk

▫Before and during project development•Results about risk perception and management•Conclusion

Introduction• Main concerns (EACEA) - quality and risk management of projects

▫Funding a project implies some risk (perceived or real) ▫Try to minimise risk by evaluating the quality of the proposal

(might reflect the quality of the project management, outcomes and final products)

• Form to be filled in▫Need to explain how quality will be assured and how risk will be

controlled and mitigated. ▫Description of each partner

• Purpose of any project manager - the project goes smooth, without problems and facing no risks till the end of it.

•Developing a project ▫Risk management is of critical concern to project manager

as unmanaged or unmitigated risks are one of the primary causes of project failure

•Identification of the risks of a project before and during the development of the project contribute to prevent them before they happen.

•The focus of this presentation to understand how partners perceive risk and how this can have impact in the final outcomes of the project.

Background•Part of the risk is perception and thus subjective.

▫Related with how people evaluate their environment and judge it. •Theories to explain the dangerousness of risk

▫Psychology (risk perception is influenced by the emotional state of the perceiver)

▫Anthropology / sociology (perceptions are socially constructed by institutions, cultural values and ways of life)

▫Interdisciplinary (it combines different areas and outlines how communications of risk events pass from the sender to a receiver and in the process the filters amplify or attenuate risk perception)

•Risk is envisaged as something people assess in a rational manner, weighing information before making a decision ▫Providing people with more information will alter their

perceptions of risk. ▫BUT providing more information alone will not eliminate

people’s irrational fears and sometimes outlandish ideas about what is truly risky

▫When people rate a risk they are filtering the image of that potential risk by their social and cultural factors as well as by their previous experience.

The ProjectEfinlit – Development of financial literacy

competencies in EU citizens using digital toolswww.efinlit.eu

Project and partnership of eFinLit• 2014 – 2016• Main aim

▫ Identify and address specific needs of EU citizens in financial literacy while using ICT tools and digital literacy

• Expected results▫ 1) state of the Art and gap analysis concerning financial literacy in Europe; 2)

Develop an online curriculum composed of 7 modules: Digital Literacy and Access to Financial Information; Basic Math; Budgeting; Savings; Indebtedness; Credit and Loans; Consumer Rights and Investment and Entrepreneurship. Part of the partners of this project have already worked together before, which may be relevant and important for risk analysis and management; 3) Develop an eFinLit online platform and mobile application and 4) Development of an adaptation toolkit.

• 8 partners from 7 different EU countries coming from a wide range of backgrounds including training centers, family care centers, research and development centers, and SMEs (see the website efinlit.eu for more details about partners).

www.efinlit.eu

Measures to assess and prevent risk

•Before project started▫Writing the proposal

The coordinator assumed the overall responsibility for risk assessment and risk management. And some measures were foreseen in order to prevent risk and

solve it in case a problem arose during the development of the project.

•Formal elements to risk management:

▫ (1) Letters of Mandate - Contractual agreement with the European Commission on behalf of the consortium and all its member organisations.

▫(2) Partner Agreements - Partner Agreements that outlined the contractual obligations of all partners to the project and to the other individual consortium members.

▫(3) Steering Committee - Main decision making body for the consortium and would assess evaluation findings and ensure that any changes required to enhance the work of the consortium was implemented.

▫(4) Internal Reporting - ISCAP required each partner to produce an initial expenditure and activity report in M6 to ensure that documents and records are sufficient to satisfy reporting requirements.

• (5) Risk Assessment - Prior to meetings there would be a risk assessment evaluate risks within the project framework. Each of the following potential risks would be assessed under 2 distinct: (1) the likelihood that this potential risk might present a problem (2) the impact that this potential risk might have on the project:▫ A) Different styles of work▫ B) Different working time▫ C) Excessive bureaucracy or in contrast neglect for formal requirements and documenting obligations▫ D) Ignorance as regards the customs of a different country▫ E) Improper distance in official relationships▫ F) Misconceptions about mutual expectations of the partners at the commencement stage of the project▫ G) Distrustfulness of the partners resulting in unwillingness to share know-how with others▫ H) Withdrawal of a transnational partner in the course of project implementation▫ I) Failure to safeguard the principle of mutual benefits for all partners in the consortium▫ J) Unequal division of work among the transnational partners▫ K) Dominant position of one partner in the project▫ L) Difficulties in communication between the partners▫ M) Different understandings of the same concepts▫ N) Default of a partner on their obligations, including failure to perform tasks or untimely performance of tasks▫ O) Lack of partner's personnel commitment to project implementation▫ P) The risk of remuneration-related conflict▫ Q) Understated or overstated budget of one of the partners

• Risk assessment procedure would be completed and documented before each partner team meeting to ensure that the project coordinator could raise issues of concern with individual partners, with the consortium as a whole or with the Project Management Committee.

▫During project development• Risk assessment

▫Before meeting - administer the questionnaire asking about which risks they thought would likelihood happen at that stage of the project and what would be the impact in the project, if that risk really arose.

▫Questionnaire available online a few days before each face-to-face meeting, the coordinator sent a message to all members asking them to fill it in.

▫Results were always presented and discussed in the meeting. ▫After the 3rd meeting (more or less at the end of the development of the

modules and start of the pilot) 3 open questions were asked to each partner: 1) In your opinion what have been / or still are the risks in the efinlit project?

Please try to refer them all since the beginning of the project. How have they evolved?

2) Did you (person / partner) adopt any strategy to deal with those risks? And 3) Can you please list at least 3 enablers and 3 constrainers of those risk?

•Till 7th october 2017 - 3 face-to-face meetings ▫one at the start of the project, ▫another one about six months later and ▫another one again six months later after the previous one.

•A final meeting will take place at the end of the project, in October 2016) and so far 3 questionnaires were administered.

Results about risk perception and management

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3rd meeting Likelihood 2nd meeting Likelihood 1st meeting Likelihood

Graph 1 – Likelihood that a risk may arise in the project 

Questionnaire

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11.5

22.5

33.5

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3rd Impact 2nd Impact 1st impact

Graph 2 – Impact that a certain risk may have in the project

Questionnaire

▫Open questions•Although there is a perception of the existence of some

risk, in particular, the risk of delay in the development / conclusion of some materials with some consequences in the final quality of the project, partners recognize that there are some enablers and constrainers of those risks (or some preventers and promoters of the risk).

Preventers identified: •1) The role of the coordinator / leader – in the management

of the discussions and willingness to find a consensus between partners; 2) Project development, in particular the adoption of the group work methodology;

•3) Partners – the attitude of some partners and in particular the attitude of one partner, pushing the others;

•4) Project management – in particular the meetings, the discussions during the meetings, the clarification of doubts, concepts, ideas, time available for the discussions and the general good atmosphere that partners feel.

Enablers of potential risk• External

▫ Target group – some lack of interest of the target group to participate in the actions of the project which implies some risk for the development and quality of the final version of the products.

• Internal▫ Partners – partners do not work at the same speed implying some delays in the production;

lack of commitment entailing some default on obligations; lack of experience which can cause some failure to perform tasks; work attitudes and style of work

▫ Management – lack of uniformisation of some materials / products which might also constitute a risk for the project. Partners might interpret guidelines in a different way and apply them differently. This might be due to other reasons (e.g. lack of experience or knowledge about the topic or about the way the product should be developed); estimated time to perform a task - it is difficult at the moment to write the proposal to think about all the aspects of the project and the development of a product. This implies that a certain number of hours was estimated to conclude a product and that actually that product needs more time.

▫ Communication – the lack of communication, quality in communication or different interpretation of the same concept.

Conclusions• Risks before being real, are perceived • Perception depends on several factors such as psychology, anthropology and

sociology, the information available or the combination of all factors of the environment.

• Project managers just wish to develop the project and reach the end with a product with quality, and without problems or facing no risks.

• One strategy to prevent or control risk can encompass ▫activities before the project is developed (prevention, meaning the

identification of possible risks and their prevention or the design of a plan to deal with the risk) and

▫during the project development as a way to assess risk every 6 months (for instance) and the attempt to prevent or minimize the risk as it arises.

• Results show that risks changes as the project is developed and as partners start to work together and acknowledging their differences (time, speed, style of work, etc.).

• We identified some enablers and preventers of risk• The identification of potential risk and the design of a plan

to prevent and deal with them seem to be a good approach. • Future work - suggest that other cases are done in order to know

all the factors that might be involved in risk identification and prevention so as some guidelines and advises might be given to project managers to deal with such situations.

Thank youAnabela Mesquitasarmento@iscap.ipp.pt