Logical Framework with Risk Management Approach Methodology

Version	Summary	Created by	Modification	Content Size	Created at	Operation
1		Isabel Ortiz Marcos	+ 3418 word(s)	3418	2022-01-12 06:57:44	\|
2	done	Jason Zhu	-119 word(s)	3299	2022-02-28 04:19:31	\| \|
3	Done	Jason Zhu	-119 word(s)	3299	2022-02-28 04:22:18	\|

This entry is adapted from the peer-reviewed paper 10.3390/su14020756

When working with international development projects (IDPs), the use of the logical framework approach (LFA) prevails as the most important tool to plan and manage these projects. How to enrich the methodology has been studied, including risk management (logical framework with risk management approach (LFRMA)), proposing an original contribution, tested with professionals that will improve the effectiveness of IDPs by increasing their success rate and their sustainability. The steps followed to design the methodology, case study analysis and design of LFRMA and the methodology itself are presented.

logical framework approach risk management project management

1. Introduction

The logical framework with risk management approach (LFRMA) methodology consists of two fields of application, the first at the organization level, and the second at the project level. Figure 1 shows the flow of the methodology. The left side shows what would correspond to the introduction of risk management in the organization, through the risk management plan. The step between risk management in the organization and risk management in the project is performed through the TTT analysis (team, project type, and terrain) ^[1]. In the risk management of a project, it will be necessary to apply everything learned from the risk management of previous projects, and in turn, everything identified in the project in progress must be applied to future projects.

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Figure 1. The LFRMA process.

Risk management must be participatory and will affect all phases of the project (identification, design, execution, monitoring, and closure), expressed in different colours. The same colours also show the stages of the LFRMA.

Risk management should be included in the culture of the organization, and it can start with the elaboration of a Risk Management Plan, in which methods, roles, and responsibilities must be established, including the scales to assess the probability of occurrence and the impact of a risk. Risk categories and formats will also be defined. This plan must also address risk response strategies, as well as risk control tools. This would allow the organization to consider risk management not only at the project level but also at the strategic level.

Previous to project definition, risks linked with the management of the project team and with the environment where the project will be developed and should be identified and analyzed. It is recommended to use the analysis TTT (team, typology, and terrain) ^[1]. Team risk analysis includes not only team members but also other stakeholders such as local organizations, finance entities, or others. The typology analysis is linked with the sector (energy, education, health, TICs, etc.) considering maturity, technology, regulation, etc. The territorial analysis refers to the geographic context for which the project is going to be defined. It is associated with the country’s risks, depending on political stability, the existence of armed conflicts, the lack of transport infrastructure, differences in language and culture, etc.

This analysis is intended to help, from the beginning, to improve risk management, to ensure that the proposed interventions are more effective. It could also help decide the appropriateness of not going ahead with the initiative if the level of risk is very high.

Once risks at the organizational level have been analyzed, LFRMA methodology proposes including a systematic analysis of risks in the project by a participative way in all the steps of the logical framework approach (LFA):

First step: stakeholders’ analysis

In the first step of the LFA (stakeholders’ analysis), both direct and indirect beneficiaries are identified, as well as those excluded, neutral, or harmed by the intervention. This first step is one of the most important tasks in the project identification stage.

For all of the stakeholders, the LFRMA suggests studying their specific characteristics and the risks derived from cultural differences that may affect the proper development of the project. To do this, it is recommended to know the terrain and if participants have spent time living with the beneficiary community, as well as contacting local leaders and other people on the ground.

The analysis of the impact of the project on all participants and the interrelation between them is very important. There are always participants that must be considered, especially to identify the risks that may arise from their situation of disadvantage and establish the necessary strategies to know them and keep them informed, thus being able to intervene in the mediation of conflicts in case they arise.

It is also important to identify the agents of change, defining the actors who can play a promoter, neutral, or blocking role, as well as their level of power. The cross between their power (or lack of it) and their disposition in favor of or against change will allow identifying risks in the way of threats but also of opportunities.

Among the tools that can be used, the most recommended are described below.

Interrelation matrix: paying special attention to how intervention changes the interrelationships between stakeholders. Any change is itself a source of risk, so it is recommended to conduct a research in two scenarios, before and after the project. Results of the analysis become a source of information on possible risks. For example, in a project to research the empowerment of rural women, the change in beneficiary women will entail changes in their interrelations within their family environment, as well as in the community, since they go from being economically dependent to having autonomy, and even suppose competition for other businesses in the area.
Power–interest matrix: Identifying the power and interest of stakeholders may help to identify risks link with a commitment to the project and with communication.
Multi-stakeholder analysis: to consider the different approaches of each stakeholder and the risks that could particularly affect each one, as well as the risks due to their interaction.

Second and third steps: problem tree and objective tree analysis

The LFRMA proposes introducing risk management in Steps Two and Three of the LFA (problem tree and objective tree), focusing on identifying as many risks as possible in a participatory process. Having the opportunity to work together with the community in the search for the most appropriate problems and solutions allows, in addition, knowing the interests of the community to identify first-hand a series of risks based on the observation of behaviors and decisions of the participants, which is of great value to the risk management. Additionally, through simple questions, one could obtain an idea of the probability of occurrence of these risks and their impact, or even about the possible strategies for responding to risks.

These studies make it possible to identify the key elements of the context in which the intervention is to be carried out; therefore, paying attention to the risks associated with this context will help to identify the risks that could affect activities in the area.

The use of questions related to risks in the process of carrying out these dynamics is recommended. Examples: what if. What change would be taking place in the community if…? Who/what would it affect. What would it take to avoid.

Fourth step: alternatives analysis

For the fourth step of the LFA (alternatives analysis), the LFRMA recommends including the risk criteria to help to ensure that the interventions carried out have considered RM from their conception, betting on the projects with the most assumable risks by the organization to improve their efficiency levels.

Among the tools that can be used, multi-criteria analysis is recommended, including risks as one more criterion.

It is important to have this analysis of alternatives available during the development of the project, given that, as the project progresses through its life cycle, and considering the risk management process, an initiative that was initially discarded may be worth considering again.

Fifth step: the logical framework matrix

The LFRMA proposes to add the risk column and analyze the assumptions column as a source of risks to the previous LFM.

The risks detected for each activity/result/objective will be shown in that column. Additionally, the new LFM or LFRMA matrix must be accompanied by the register of these risks, which will include, at least, their importance (as a result of their probability of occurrence due to their impact) and their response, if considered necessary because the risk is not acceptable.

2. The LFRMA Like a Participative Process

In the LFRMA, the identification, analysis, and response to risks associated with each of these stages are proposed as participatory, as the LFA itself is supposed to be. Like any participatory process, it is recommended to carry it out in two steps, first in a segregated manner and concluding with a joint search for consensus. The different stakeholders to work with would be, for example, the project team, the beneficiary community initially segregated by gender, and then, jointly, local leaders. After first work in groups, the last joint session is recommended in which consensus is sought through multi-stakeholder dialogue. It is possible to count on all the participants who have previously worked separately or with the people designated in those processes as their representatives.

For participatory processes to be beneficial, it is recommended to use very simple risk management techniques and previously introduce the concepts with which you are going to work.

The tools that can facilitate this process are the Risk Breakdown Structure and the Probability–Impact Matrix, simplified according to the needs of the participants, for risk assessment.

It is highly recommended, in addition, to have the judgment of experts in the area and documentation related to previous projects carried out and their lessons learned.

Risk response strategies should have been defined in the Risk Management Plan as well as the level of acceptance of risks.

When implementing responses to unaccepted risks, it is recommended to use the Risk–Response Matrix, which represents the importance of risk versus the difficulty of its response and which determines which responses should be prioritized and which ones can be postponed or rethought.

Among the responses to prioritize would be those that depend on the performing organization itself and that do not require too many resources. For example, given the risk that the participants do not attend the planned training sessions because they need to attend to their current work that is their source of income, the training sessions could be set at sunset.

For those responses that require large resources or these that are less important or not imminent, it is convenient to think about them and consider other options, for which it is useful to establish multi-stakeholder dialogues to learn different points of view, in case any of them could raise a new one or a more affordable response. All those responses that are easy for the organization to attend should be allowed, no matter how low the risk is.

3. Risk Control and Project Life Cycle

During project development, new risks may appear, and existing ones may vary in some of their components (probability or impact) or disappear, so it is important to monitor their evolution throughout the project.

Documenting risks will not only help in this process but will also allow each organization to have valuable information for new projects. Although each project is unique, relying on previous risk registers can greatly facilitate RM in new projects.

The periodicity for risk control and the person responsible for controlling them, as well as the format of the risk register used, must be defined in the Risk Management Plan of each organization.

It is very useful to analyze the risks linked with each project’s life cycle phase. To do this, it is proposed to place the risk categories that contain the most important risks on the life cycle diagram selected by the organization.

4. Methodology Validation

Validation of the methodology is made with eight professionals who had previously answered the questionnaire on the LF. These experts were chosen from among the thirty who had expressed their interest in future consultations, trying to achieve the representativeness of all the actors and including both Spanish (5) and Colombian (3) professionals. All of them were previously consulted about their availability for reading and subsequent comments on the methodology, all accepting the commitment to also carry it out within the established time of one week.

The panel of experts (E) was composed of:

(E1): head of the Intermon-Oxfam International Cooperation Department.
(E2): professor of projects at a public Spanish university and independent evaluator of International Development Projects.
(E3): coordinator of energy projects in Spanish NGDO ONGAWA.
(E4): technician responsible for development cooperation of the Government of Cauca (Colombia).
(E5): director of the Acciona.org foundation.
(E6): university researcher at the Center for Innovation and Technologies for Human Development.
(E7): coordinator of the Territorial Office of Nariño, Cauca, and Putumayo of the United Nations Development Program (UNDP).
(E8): coordinator of the Bank of Projects of the Regional Autonomous Corporation of Santander (Colombia).

All participants were asked separately about the four open-ended questions that are summarized below.

Question 1: Do you think this methodology can help to improve the effectiveness of Development Cooperation Projects and therefore the impact on the beneficiary community? Why?

All the people asked agreed that this methodology will help to improve the levels of project success, recognizing that many of the current projects do not take into account the risks, but, above all, that there is no effective learning from a project to another.

With the risk register, it is possible to give, firstly, a “continuity to the evolution of risks, beyond the initial identification and, above all, an identification of risks of great value for future projects” [E1 and E2]. It highlights that “it has great potential in being able to be systematized through computer programs that allow risks to be monitored through the risk register presented” [E8].

In addition, “it would allow better choice and definition of interventions during the identification and design phase” [E3], and “it would help to better deal with risks during the implementation phase by having a structured contingency plan” [E3 and E4], which “would mean a reduction in costs and delays in interventions” [E3] and “to improve project results, directly impacting the beneficiary community” [E5]. It also provides the “novelty of counting on the community to identify risks, which is very valuable given that the people of the territories are the ones who have a better vision and knowledge of the territory, and this will allow people to better identify some risks that are not usually perceived by the teams who design the project” [E4].

Just because “the fact of introducing a risk management improves project planning per se, by allowing a deeper knowledge of the interventions” [E6], “risk management should be essential in any cooperation project, as it is in other sectors, and the best way to internalize it is to do so through a very common tool in this sector such as LFA” [E5].

“In Colombia, particularly, not paying due attention to risks has caused large-scale IDP to be forgotten without causing any favorable impact” [E7]. This methodology “can also be complemented in the case of Colombia with Corruption Risk Maps”, recently published at the national level [E8].

Question 2: What do you like the most about the methodology? Why?

All the people surveyed highlighted the simplicity of the methodology and the ease of integration with other approaches, especially valuing the incorporation of analyzing risks internally in the organization and, specifically, the TTT model presented ^[1].

The “integration in the LFA’s steps” [E5] and its “compatibility with other approaches and with the theories of change” [E1] and the “participatory nature of the methodology, including the beneficiary community” [E1 and E4] were valued.

Among the tools presented, the TTT ^[1] analysis stands out, “especially because it includes multi-actor aspects” [E6], but “the risk association diagram for each phase of the project life cycle” [E1 and E3] is also highly valued. Also concerning the previous question, “having a risk register that also makes it possible to consolidate lessons learned for future projects is of great value” [E4 and E7].

The fact that it is a “markedly visual” methodology [E3] consolidates its “ease of understanding” [E8] “through simple steps that connect very well with the logic of the projects” [E7], highlighting “the pragmatic way of integrating risk management into the LFA matrix” [E5].

However, above all, the fact was valued that, with very little additional effort and without requiring many more resources, the LFA planning tool [E2, E5, and E7] will be greatly improved.

Question 3: What do you like least about the methodology? Why?

The main concern expressed by four of the participants was related to the effort required to carry out such an exhaustive risk analysis in the initial stages of the project where it is not even clear that the intervention will be carried out. In response to this concern and the valuable comments provided by some of the participants, some steps recommended in the initial proposal were eliminated, and their use was simplified in the steps of the logical framework, reducing the incidence of the integration of risk management in some steps of the LFA, as in the problem and objective tree. This managed to provide the requested “balance” “between the role of the risk management and the project management itself” [E2].

Another weakness of the initial proposal was the “lack of examples” [E1, E7, and E8], which was improved with the inclusion of some simple examples.

Apart from that, one of the comments given was very interesting regarding the need to “emphasize in the beneficiary communities that the search for risks is to make the intervention more effective, but that the project is going to be carried out, since, if this is not clear, people can be placed in a defensive position and not collaborate in the identification of risks for fear that their discovery will make the project not carried out” [E4].

Another negative point has to do with the difficulty of solving, through a single improvement, the “stiffness limitations of the LFA” [E6]. Although the LFRMA methodology proposes to attend to the evolution of risks and respond to them promptly, indeed, it is only the most accepted improvement, but the LFA could admit more.

Question 4: Would you apply it, or would you recommend its application? Why?

All of the people asked would apply and recommend the application of this methodology, considering that “the third case of failure of a project is the poor consideration of risks”, the other two possible being poor formulation or deficient implementation [E2].

Most highlight the need to apply it in the initial stages of the project (identification and design), given that “any change not considered in the initial planning generally means waste of time and resources” [E4], since “the frameworks, the rigid rules of cooperation, as well as the capacity of many NGDOs, make it more difficult to manage risks during project execution” [E3].

Some experts also make a distinction for its partial application in interventions of short duration or with very little scope [E3, E5, and E6].

The proposal to “demonstrate the virtues of the application by putting real cases of what happens when you don’t apply it” [E1] is also very suggestive. Although the methodology is new and, therefore, there are no results of its application to allow comparisons, there are many and known IDPs that have failed due to not having good risk management; these examples can be used when disseminating the use of the methodology.

After consulting these professionals, more emphasis has been placed on the differences between applications of the methodology, on the one hand, for the organization and, on the other hand, for the project management itself, given that the part dedicated to the organization is one of the most appreciated. With this, its understanding is facilitated and the need to integrate the risk management culture in the world of development cooperation is enhanced. Likewise, more examples have been added for a good understanding of the proposed tools.

References

Rodríguez-Rivero, R. Metodología del Marco Lógico con Enfoque de Gestión de Riesgos Para Mejorar la Eficacia de los Proyectos de Cooperación al Desarrollo. Ph.D. Thesis, Universidad Politécnica de Madrid, ETSI Industriales, Madrid, Spain, 2019.

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