Project managers may fail to achieve their project objectives because they don’t know how to take a look backward and forward at their risks.
Some project managers only look backward.
If we only look backward, we will miss opportunities that lie before us, and we will likely be blindsided by threats. Not a good thing, eh?
Think about it — we don’t drive by keeping our eyes on the rear view mirror only, do we?
Some project managers only look forward.
Project managers who only look forward fail to learn from their past successes and mistakes. These individuals show their insanity, doing the same things and expecting better results.
Project managers can use risk audits to look backward and risk reviews to look forward. Let’s explore how to perform these two powerful techniques.
How to Look Backward (Risk Audit)
Tom was asked to manage a project to implement an insurance company claims customer service center that would house 100 employees. He decided to have a risk audit performed when the team had completed 40% of the project. Things were going fairly well, but Tom was concerned about an increasing number of issues, particularly with two risk owners.
Tom asked an internal risk audit group — comprised of one company project manager, one IT employee, and one claims manager — to conduct the audit. The team completed the audit in two weeks and discovered the following:
- One risk owner — John Billings — had been negligent in managing a significant risk for a critical path activity, resulting in an adverse impact to the schedule of two weeks. Why had Mr. Billings been negligent? He had lost two employees in the last two months, forcing him to pick up the slack.
- There were two major risks where no responses had been taken and there were no contingency or fallback plans.
- The team missed an opportunity that could have saved the project $20,000.
- The risk evaluation process needed improvements. The scale being used for the qualitative risk analysis was broad and prone to bias.
The findings were shared with Tom and the project sponsor. The following changes were made:
- John Billings was replaced with another risk owner.
- Tom met with the risk owners who had failed to respond to their risks, shared the audit findings, and asked that response plans be developed and executed.
- Tom included specific exercises to identify opportunities going forward in the project.
- Tom refined the qualitative risk evaluation scale.
Who Performs the Risk Audits?
Risk audits may be performed by the project manager, the project manager and team, or a risk audit team. What is the focus of the audit? It is a retrospective review where we ask “How did we do?”
- Review the effectiveness of the responses to risks
- Review the effectiveness of the risk owners
- Review the effectiveness of the risk processes
How Do Risk Audits Help?
The output of the risk audit is the lessons learned that enable the project manager and the team to increase the likelihood and impact of positive events and decrease the likelihood and impact of negative events.
Think the risk audit is too time-consuming to provide value? Think again. The size of the risk audit team and the time invested should be commensurate with the size and complexity of the projects. I’ve completed small risk audits with me and a couple of team members in an hour or less.
How to Look Forward (Risk Review)
How can project managers make better decisions and get better results? Try a risk review.
Risk reviews are prospective and forward-looking. We ask, “How will we do?” If we see stumbling blocks or hazards, what can we do now to clear the way? How can we seize opportunities?
Questions to Ask in Risk Reviews
Project managers and their teams periodically review their project risks for the following:
- What have we learned from our risk audits that we should apply going forward?
- Are there new risks?
- Has the probability and impact changed?
- Are there individual risks that are merging to form a powerful set of risks?
- Should we modify our responses including contingency and fallback plans?
- Should we close irrelevant risks?
- Are the residual risks increasing or decreasing?
For more help tips, check out my post 12 Questions For Gaining Control of Your Risks.
Give Your Worst Project an Eye Exam
Pick your worst project, where things have been hazy and crazy. Look backward with a risk audit and forward with a risk review. You will likely gain insights and perspective as you see things with fresh eyes. Best wishes!
Don’t have a risk register? It’s never too late! Grab my risk register template on the Free Stuff Page.