Every project manager deals with risks. We all face significant uncertainty. Allow me to share seven things you ought to know about identifying risks.
Project managers must address unrealistic time frames where failure seems unavoidable, scope creep, ambiguous requirements, delays from third parties, and the lack of required skills, to name a few.
How do we manage risks and the causal factors?
Risk management begins with the practice of identifying risks. In this process, we consider future events or conditions that may impact our ability to achieve our goals. Risk identification includes figuring out where, when, how, and why such events may occur.
Not sure how to get the most value from risk identification? Well, here are answers to common questions. If you understand these basic principles, you have the foundation for an effective and efficient risk identification process.
Tom is the program manager for a large, complex program comprised of eight projects. He thinks his project managers have identified most of their risks, but he’s not sure where to focus his attention. What areas have the highest risk exposure? Let’s look at how to actually define risk categories and how they can help Tom (and you).
What are Risk Categories?
Risk categories allow you to group individual project risks for evaluating and responding to risks.
Project managers often use a common set of project risk categories: schedule, cost, quality, and scope. But project managers may use other categories.
Steven Covey introduced the concept of Quadrant II activities—working on things that are important but are not urgent. Planning is a powerful Quadrant II activity that can save you time and energy. Think about the future so you can make better decisions in the present. Let’s talk about how to plan your risk management from start to finish.
First Things First
Some people think of risk management plans in the wrong way. Risk management plans are not a list of risks and what you plan to do (e.g. risk register). Rather the plan is your approach to risk management.
How do you plan to identify and evaluate risks?
How will you develop risk response plans?
How will you periodically review risks and your risk management processes?
Why is that some project managers have over or undersized risk management plans? First, individuals may be looking for shortcuts. They simply copy someone else’s plan and check a box. Second, others want to impress others with their knowledge by writing plans longer than The Grapes of Wrath.
Want to really make a good impression? Work with your team to develop a risk management plan that is fitting to your project, aids in decision making, and adds value. Document the plan but keep it practical and to-the-point.
So, how can we right-size our plans? Here are four steps to make it easier.
When I teach project management, I often ask, “What are the top contributors to challenged or failed projects?” Without exception, I hear—poor communication. Project managers understand the importance. How can we improve? Let’s look at five bad communication habits to avoid and what to do about each.
Busy Billy blasts an email containing the project charter to all his stakeholders. He quickly moves on to other project management tasks, relieved that he’s done his part in getting everyone on the same page. He never mentions it again.
This scenario reminds me of the husband who told his wife 30 years ago that he loved her. She hasn’t heard those words since. But he thinks he’s done his job. Spouses (and project stakeholders) need to hear things more than once.
How to improve: Plan your communication activities. For example, the project sponsor and project manager could review the project charter in the kick-off meeting. Bill could periodically review the charter with his project team to ensure that the team is aligned with the original intent of the project.
Learn to Better Manage Enterprise Risks Through Project Risk Management
Many organizations have adopted enterprise risk management (ERM) as a way to make better decisions, get stronger operating results, and meet regulatory requirements. These same organizations may have program and project managers managing scores of projects. However, few organizations have yet to actually unite the enterprise and project risk management efforts.
Consequently, efforts are disjointed, projects lack strategic alignment with the organizational objectives, and resources are not properly utilized. Unfortunately, these organizations are not realizing their full potential.
What is Enterprise Risk Management?
The Risk Management Society (RIMS) defines ERM as “a strategic business discipline that supports the achievement of an organization’s objectives by addressing the full spectrum of its risks and managing the combined impact of those risks as an interrelated risk portfolio.” Why is ERM important?
There are many ways to engage stakeholders. You can facilitate discussions in your project meetings. A business analyst may elicit requirements. The lead tester may develop a team for testing. Let’s look at a different form of engagement–the use of an internal blog.
Engage: occupy, attract, or involve (someone’s interest or attention)
One communication tool that I’ve used for enterprise programs such as implementing a Project Management Office (PMO) or an Enterprise Risk Management (ERM) Program is an internal blog. Blogs are a form of pull communication used for large volumes of information or for large audiences such as an organization. Subscribers access the blog content at their own discretion.
What’s An Internal Blog?
An internal organization or company blog is a regularly updated website or web page that is written in an informal or conversational style. An individual or a small group may run the blog. Blogs are a great way to share internal news and knowledge, improve company and team communication, and inspire stakeholders.
Project stakeholders–individuals, groups, and organizations– may be impacted by or may have an impact on your projects. It’s critical to understand how people inside and outside your organization may affect your projects. Let’s explore stakeholder management power tools that can help you quickly identify which stakeholders matter.
Why Analyze Project Stakeholders
Some project managers say they don’t have enough time to analyze the stakeholders. So, why is it important? The short answer is to determine how to spend the limited time project managers do have.
Stakeholders are not the same. Their power, interest, influence, expectations, and impact differ greatly. Consequently, it’s important to identify the most influential stakeholders.