It’s All About Risk

By Denise DeCarlo

As a project manager, it all comes down to RISK. How much risk are you willing to take? How much risk is your customer willing to tolerate? Are you a risk taker, risk neutral or risk adverse – or do you even know? Each and every day project managers make key decisions that lead you to the path of project completion. Sprinkled within those decisions are opportunities to identify, evaluate, and consider the risk(s) related to project success. Come with me on a journey to discover for yourself a process YOU can go through as you address and monitor risk for your projects.

Let’s begin with the harsh realities. NOBODY seems to have time for planning. Typically you’re given a project that’s already underway and you haven’t even defined the scope completely. Typical scene? How you handle this situation is the difference between you being an “ok” project manager and one of the best! It’s your choice.

You can integrate basic risk management into your project without your project stakeholders even realizing what you’re doing (This doesn’t mean your stakeholders won’t be involved!) Risk management involves 1) Risk Identification 2) Risk Assessment and Analysis 3) Risk Response Planning and 4) Risk Monitoring and Control. However, it’s HOW you implement these processes that can make a big difference in the success of your project.

Risk Identification – involves the identification and documentation of the risk (positive and negative) that could impact your project. It includes the obvious and not so obvious things such as; lack of technical training for your staff, lack of commitment from the customer for enough resources, using bleeding edge technology, needing to implement something quickly, grappling with defining requirements clearly and completely. The key to risk identification is involving the RIGHT people to identify what the risks are for this given project. As knowledgeable as you, the project manager, may be – you are simply one person with your given viewpoint and experiences. Hold a “risk workshop” where you actually brainstorm with the customer, sponsor, team members, end users, impacted business units and any other experts specific to the solution you are implementing. Document ALL ideas that surface from the meeting. Ensure it is CLEAR what the identified risks are. It’s ideal to have someone facilitate this session, but if required, the project manager could provide the facilitation. By involving the “right” people, this greatly increases your chances of identifying the various risk items that may impact your project. The workshop, however, serves another very important role: obtaining buy-in from the stakeholders on what the risk items are for this project. If one of the risk events does surface later in the project, they won’t be as “surprised” by the event. In the event a new risk surfaces that the stakeholders did not identify – less finger pointing occurs because everyone had a chance to identify risks at the onset of the project. Please keep in mind that as your project evolves and scope changes, you need to re-visit the risk identification process. This is NOT a one-time shot at the beginning of the project.

All this being said leads us to a question: How should the project manager proceed with estimation? The answer: maybe the practice doesn’t change much, but the process is done OPENLY, using standard processes, including a full-circle communication process. Standard practices, such as utilizing the PERT technique – asking for and processing individuals optimistic, most likely and pessimistic estimates, and providing conditions for the estimates (i.e. this task can be performed by a technician of average competency in two weeks if they are not interrupted by other work demands) promotes additional thought and consideration for estimates. Standard formulas, such as (Optimistic + (4*Most Likely) + Pessimistic)/6 can then be applied to determine a PERT estimate. Secondly, reviewing the actual outcome against the original estimate with the estimator and the person that performed the work demonstrates your dedication to the process and provides a means to educate and drive improvement for the task estimators. All this enhances your dedication to the process and importance of estimating accurately, demonstrates a well thought out approach, and upholds your integrity from a relationship standpoint. Have an approach, follow the approach and involve and educate your team members on that approach is the best way to maintain your integrity when approaching the estimation process.

Personal Interactions

In addition to solid integrity in approaching the estimation process, there are a number of instances where interactions with your team, sponsor and other stakeholders can inadvertently alter their perception of you and your skills. One simple but often overlooked item: are you an optimist or a pessimist by nature? The impressions you give stakeholders about the status of the project or the impact of events – versus what actually transpires – can significantly alter how you are perceived, and how stakeholders will react to your opinions and impressions.

Status reporting – in particular judging when to share an issue with management or the project sponsor – involves a series of judgment calls that can be pivotal in forming perceptions of your abilities as a project manager. As a general rule communicating an issue will be more helpful, as long as that sharing is accompanied with a summary of the actions being taken and your approach for providing ongoing updates on the status of the issue. PM’s should avoid the temptation to focus on fixing the problems that surface without communicating them as a means of “not rocking the boat” or looking like you can’t work through issues. The odd situation that makes its way to your manager or the sponsor and “blindsides” them will set you back significantly. Carefully assess the possibility of an issue surfacing to your management; if a possibility exists, it is wiser to communicate the situation and the action you are taking to resolve the issue. If unsure, it is usually better to over-communicate than under-communicate.

Risk Monitoring and Control – now you’re ready to start rocking! As you begin (or continue) to deliver your project to completion it’s your job to watch for risks. Create a risk log of all high and medium risks to monitor their status. As risks are closed out, move them to a “Closed Risk Log” so a record of events and responses is maintained. It’s very important to share this risk log with appropriate stakeholders to keep them engaged in the risk process. Nobody likes surprises, including your customer and sponsor. Be forthright about what is happening on the project and what the team is doing to handle various challenges. And don’t forget, you may need to reassess what risk events exist for your project over time and as scope changes.

People often ask if involving the customer this closely with risk is REALLY a good idea. The results, however, speak for themselves. By engaging the customer in the process you will ultimately build trust with them. You can demonstrate YOU are in control and aware of the problems that exist, instilling confidence in your abilities. It shows you are managing the project effectively. Now, with that said, it’s critical for you to have your “ducks in a row”. If you know there is a problem brewing – meet with your core team first to strategize on how the risk could be addressed and come up with an action plan. Ensure everyone is in agreement (or willing to go to the customer with one voice) with some ideas on how the risk should be addressed. Even if the customer disagrees with your approach, you can then negotiate a solution together that you can agree upon.

If you instill some of these basic concepts within your project – your project implementations will improve! You can take the time to plan, coordinate and manage risks – or you can choose to fight fires and react to the risks that surface because you didn’t have the “time” to plan for them. It’s your choice!

 

 

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