Raise the Quality of Your Risk Plan
Valarie Griep, MBA, PMP - June 2011
Risk is all around us and without much conscious thought we experience it every day. Risk is simply uncertainty and the consequences can be positive or negative. When the stakes are high, we usually take a proactive approach, weighing the probability and impact of the potential event. "I'd better repair that crack in the house foundation soon, or it could get bigger and the basement could flood."
When it comes to our projects, we must proactively articulate the threats and stay alert to opportunities. To raise the quality of your risk plan consider these often-overlooked sources of project risk, their causes, and how you can proactively knock them down.
Scope Clarity
Clear scope definition will save you endless headaches. This can't be overstated. Leaving scope open-ended can be tempting—we are in a hurry to get the project started or we want to remain flexible in order to take advantage of opportunities along the way. Stay strong. Scope should be explicit, detailed, documented, and communicated so that the team and stakeholders have a good understanding of what problem is being addressed and what the project intends to accomplish. This is the start of setting stakeholder expectations. Over time, the scope may need to change to take advantage of those opportunities, so have a documented and orderly change control process that will keep everyone on the same page and keep the scope clear.
Project Manager Experience
The Project Manager is integral to the project. The team looks to them for leadership, work direction, and support. Unfortunately you may be asked to lead a project for which you are ill equipped—you need to acknowledge that and plan to get the help you need. First, try to identify specifically where you may need the help or advice. Look to your project management office (PMO), Master Black Belt, a peer/mentor, a coach, or a training class for help. Perhaps a person on your team can coach or even fill the part of your role that is weak—as a technical lead, with administrative help, or simply critiquing your presentations. Whatever your need, acknowledge it and plan for what will help you develop and help the project be successful.
Team Experience
Project team members may be chosen for their expertise, or they may be chosen because they have stake in the project goals, or they may just be the people who have time. It is the Project Manager's job to leverage their team member's strengths and minimize their shortcomings. However, the project may still end up short on experience. Clearly communicating roles and responsibilities is important, as is being specific about how to ask for help. Bad news early is always better than bad news late. Your team process should ensure less experienced team members are heard more frequently and encourage them to get the help they need as soon as possible. Perhaps you can also pair less experienced team members with their more experienced colleagues on those tasks with low tolerance for re-work. Mitigating the risk associated with inexperienced team members is good for your project, and is an investment in your team members' development.
Innovation
Uncharted territory is risky. Innovation is not precise. Schedule and cost uncertainty is high on projects requiring innovation because we are guessing more than usual—we have less to base our estimates on. If possible, use rolling wave estimating (estimate the near term activities in detail and provide high level estimates of the future work, then re-estimate the future work after more is known). Alternatively, use experts to estimate the time and cost of likely tasks and communicate the assumptions and your degree of (un)certainty at the beginning of the project, and continually throughout. If you are using a methodology, leverage the built in milestones and review process to keep stakeholders abreast of innovative efforts, progress, and areas still awash in uncertainty.
Organizational support
Support comes in two flavors—philosophical (emotional buy-in) and tangible (cash, capital, people). We need both for our project to achieve results. When the organization's politics, culture, or "the way we've always done it" mentality get in the way of stakeholder support everything gets more difficult. Work takes longer, decisions require more effort and take more time, approvals get delayed, and access to resources dry up. If your project is one that will require extensive stakeholder support, build into your project plan the work necessary to obtain support. Ask your Project Sponsor for their help in garnering support. Nurture the relationship with your sponsor by educating and engaging her/him on topics likely to be controversial to stakeholders. Make sure you and your Project Sponsor are a united front.
Organization changes
The status quo doesn't last forever as hard as it tries. During the life of a project the organization can change—new leadership, changing priorities, new customers, product changes, some of these changes can impact your project. A clear understanding of your project's scope and expected benefit will equip you to quickly assess risk. If the project's expected benefits are quantified and widely communicated you may weather the change. Your Project Sponsor is an ally in this regard; they can champion the project amongst their colleagues and the appropriate leadership. Consider your Project Sponsor's role in the organization and the likelihood they are positioned to hear about changes that could affect your project. Prepare your Project Sponsor to quickly communicate your project's status and reiterate its value as questions arise. Make sure he/she always has current project information.
External environment changes
Like your own organization, the external environment is constantly changing and you have even less control over it. Identifying external risks, such as new regulations or laws, improving or deteriorating economic conditions, changes with suppliers, or new business ideas ('going green'), can be difficult and the temptation is to just react when they impact your project. Although it is difficult to plan for specifics, you can brainstorm the possibilities with stakeholders and then assess the likelihood they will occur, and if they do, the impact your project would sustain.
Risk is all around us, and as your project plans for certain uncertainty consider the risk inherent in unclear scope, the inexperience of people, changes to the organization, the environment the project will operate in, and the very nature of innovation. Ultimately, your risk plan is only as good as the thought that went into it, and digging deeper into these sources of risk could raise the quality of your plan and your project.
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