Some project managers make timely responses to risks, resulting in positive progress toward their project goals; others act haphazardly, resulting in undesirable consequences. Chuck Swindoll told a funny story that illustrates the dangers of costly mistakes when responding to risks.
“Chippy the parakeet never saw it coming. One second he was peacefully perched in his cage singing, the next he was sucked in, washed up, and blown over. His problem began when his owner decided to clean his cage with a vacuum. She stuck the nozzle in to suck up the seeds and feathers at the bottom of the cage. Then the phone rang. Instinctively she turned to pick it up. She’d barely said ‘hello’ and then thud and a woosh, Chippy got sucked in.
The owner gasped, dropped the phone and snapped off the vacuum. She unzipped the bag and there was Chippy alive, but stunned; covered with heavy black dust. She grabbed Chippy and rushed to the bathtub, turned on the faucet full blast and held Chippy under a torrent of ice-cold water, power-washing him clean. Then she did what any compassionate pet owner would do: she snatched up the hairdryer and blasted the wet, shivering little bird with hot air.’ Swindoll closed his story with these words: ‘Chippy doesn’t sing much anymore.”
“Lord, deliver me from the man who never makes a mistake, and also from the man who makes the same mistake twice.” –Dr. William Mayo
Mistakes We Make When Responding to Risks
We all make mistakes. The important thing is that we learn from our mistakes and mature as projects managers. Let’s look at 12 common mistakes that project managers make when responding to risks:
- Failure to identify risk owners. Once a risk has been identified, project managers should ask, “Who owns the risk?” A risk owner is a person responsible for developing and executing a risk response plan.
- Failure to respond to several small, related risks. If we fail to analyze the relationships between risks, we may not understand how risks relate to one another. Individual small risks seem impotent. However, several small, related risks can have a great impact (as threats and opportunities).
- Failure to identify and plan for secondary risks. When risk owners are developing risk response plans, they may fail to consider secondary risks, risks that arise as a direct result of implementing a risk response (think about Chippy). Wise project managers educate and ask their risk owners to identify and plan for significant secondary risks.
- Failure to develop contingency plans. Some risk response plans are executed immediately; other risk response plans are contingent. That is to say; the plans will only be executed under certain predefined conditions.
- Failure to develop fallback plans. What should a risk owner do if the contingency plan fails? Risk owners should develop and be prepared to execute a fallback plan for significant risks. The fallback plan may be used to mitigate further a threat or enhance an opportunity. A fallback plan may also be defined for cases where a risk may occur.
- Failure to define risk triggers. Some risk owners do a great job of defining contingency plans but fail to define clearly the risk triggering events such as missing a milestone. Triggers may be used to provide the warning that the risk is about to occur, providing time to implement the risk response plan.
- Failure to respond to opportunities. Many project managers still struggle with the fact that risks include positive events or conditions, that if they occur, cause a positive impact on the project goals. Therefore, many project managers fail to identify these positive events and miss the opportunities that could save the project or enhance the project’s value.
- Failure to update project management plans including the schedule management plan, cost management plan, quality management plan, procurement management plan, human resource plan, scope baseline, schedule baseline, and cost baseline. As risk owners develop response plans, project managers should update the project management plans accordingly. For example, the project manager may add new activities (or omitted activities) to the schedule and further define how contingency reserves will be consumed.
- Failure to update the risk register. Tom, a project manager, knows he can’t keep all the risk information in his head. He creates a risk register when starting the risk identification process. As risk owners create response plans, Tom makes sure that the register is updated with the plans.
- Failure to update assumptions log. Project managers and team members make lots of assumptions, particularly in the early parts of a project, based on the information at hand. As the project team discovers new information, previously identified assumptions may need updating, or new assumptions may need to be added.
- Failure to create change requests. The results of risk response planning can trigger change requests that, if approved, may require changes to the project management plan or other project documents. Some changes may even require new baselines.
- Failure to create contracts or agreements with third parties. Some risk owners may wish to leverage a third party to respond to risks. The project manager should ensure these decisions and contracts are outlined and approved, as needed.
Taking Action on Risk Response Planning
Experienced project managers know this truism – either you control your risks, or they will control you. The best project managers respond to significant risks promptly.
Consider using this list as a checklist for one of your current projects. Review your risk register and determine how you can strengthen your response plans. Keep your risk management as simple as possible while ensuring that the responses are economical and effective. Scale your response plans as needed; do more for larger complex projects and less for smaller projects.