Five Ways to Reduce Risk Exposure Early

When do you think risk exposure or the level of risk is greatest in a project – in the beginning, in the middle, or at the end of the project?

Photo courtesy of DollarPhoto.com (edited in Canva)

Photo courtesy of DollarPhoto.com (edited in Canva)

Risk exposure is highest in the beginning of your projects. Why? We have the least amount of information – this is when uncertainty is greatest. We know very little about:

  • Goals of the project
  • Deliverables
  • Requirements
  • Budget
  • Constraints
  • Success criteria
  • Availability of resources
  • Who will bring the donuts to the project meetings? (just kidding)

Here are five activities that you can undertake to reduce the risk exposure early.

1. Determine Who Needs to Be at the Table. Have you ever seen a project manager or project team purposely keep a stakeholder in the dark about a project? The stakeholder discovers the project later and exerts their power and influence. This often results in rework and adverse impacts to schedule and budget. Identify your stakeholders early and seek to understand their concerns and interest.

2. Get Everyone on the Same Page. If you ask two people to explain the purpose of a new project, you may get completely different answers. Work with the project sponsor, project team, and stakeholders to draft the initial project charter. Project charters include but are not limited to:

  • Project Title
  • Project Description
  • Project Goals
  • Deliverables
  • Assumptions and Constraints
  • High-Level Requirements
  • High-Level Risks (Threats & Opportunities)
  • Stakeholders

These steps can greatly improve focus, understanding, and alignment of your team and stakeholders.

Related Article: How to Develop a Project Charter

3. Clarify Your Goals. Early in projects, goals are often loosely defined leading to misunderstandings.  Work with your project sponsor to define, clarify, and communicate the goals.

Here is a suggested syntax for goals: Verb -> Focus -> Target -> Deadline. For example: “Increase profits by 5% before the end of the year.” Using this syntax ensures consistency in your goals and helps to ensure that your goals are specific and measurable.

Related Article: How to Write Clear Goals

4. Identify Risks (Threats & Opportunities). In the early stages of a project, we have yet to discover the risks. There are numerous tools and techniques that can help you, your project team, and your stakeholders identify risks such as:

  • Information Gathering Techniques (e.g., brainstorming, interviews, Delphi Technique)
  • Diagramming Techniques (e.g., context diagrams, flowcharts)
  • SWOT (i.e., Strengths, Weaknesses, Opportunities, and Threats)
  • Pre-Mortem. Describe a hypothetical failed or challenged project to your project team. Have your team identify the risks and determine risk responses.
  • Assumption Analysis. Ensure that assumptions are reviewed, understood, and documented.
  • Prompt List. This is a list of categories that prompts stakeholders to identify additional risks in each category.
  • Checklist Analysis. This is list of potential risks used to help identify additional risks.
  • Document Reviews. Review documents for the project and related projects.

You may use a combination of techniques. For example, you might do a brainstorming exercise and follow up with review of a checklist or prompt list.

5. Clarify Expectations. Some people think that you can read their minds. As I interact with executive leadership, project team members, and stakeholders, I ask about their expectations.

What do they desire from the project? What do they expect will happen during the project? What expectations have not been expressed by them or others?

Question: I am sure that you have thought of other ways to manage risks early. What other steps do you suggest?

Editors Note: This article was originally published in January, 2013 and has been revamped and updated for accuracy and comprehensiveness.