Have you ever had someone torpedo your project? Did this individual have a motive to undermine your efforts? Or, did you make some stakeholder mistakes that gave rise to this event?

Either way, it's hindering your progress. Things are not going as planned. What can we do to manage stakeholder risks better?

A Stakeholder Story

The project manager formed a project team. Within days, the project team started making programming changes. The team worked evenings and weekends.

This is a guest article by Elizabeth Harrin from GirlsGuideToPM.com.

Much of the time, risk management at the beginning of a project looks like getting the team in a room to review the whole project and work out what might be coming that could affect how the project proceeds.

The project manager writes up the discussion in the risk register along with what the team is going to do to avoid or amplify (in the case of positive risk) the risks. As the project progresses, more risks are identified, dutifully added and managed.

What’s happening here is that we’re looking at the work and impacts on the work. This approach to risk management is very task driven. We ask questions like:

• What might prevent us from hitting that milestone on time?
• What might mean we need to ask for a budget increase during this phase?
• What quality problems might we come across that would give the client an issue?
• Who might be a difficult stakeholder on the project?

These are all valid questions. But they miss one crucial area that massively affects everything on the project every day. Us. The project team.

Our skills, ability to work together as a team, or lack thereof, present the biggest chance of success for the project and also the biggest risk.

Here are some examples of how the people on your team make your project inherently more risky.

Why is project quality often neglected? Well, it's hard to manage things we don't understand. And quality seems to be an esoteric concept to many people. Therefore, let's define quality and discuss some practical ways to manage project quality.

Quality Management Tips

1. Make quality management pragmatic. Many people do not invest appropriate effort towards quality because they do not understand it. The Project Management Institute defines quality as “conformance to requirements and fitness of use.” According to this definition, quality comes through clearly defining and meeting the requirements of the users and stakeholders.

Changes in project risks are inevitable. As a project progresses, the probability and impact of current risks change, new risks emerge, and residual risks may increase or decrease. What tools and techniques can project managers use for controlling risks and getting the results they are looking for?

Allow me to introduce you to two project managers—Tom and Susan. Tom started his project with a risk identification exercise with several stakeholders resulting in a list of 77 risks. He entered these risks into an Excel spreadsheet and stored the file in his project repository (and never looked at it again).

Susan, on the other hand, facilitated an early risk identification workshop. She periodically met with her team to review current risks and used additional techniques to identify new risks. In these risk review sessions, the team discussed the effectiveness of the risk responses and the risk management processes.

Which team do you think had the greatest chance of meeting their project objectives? Yes, Susan’s team wins the day, hands down.

Let’s look at six tools and techniques recommended in the Project Management Body of Knowledge (PMBOK) 5th Edition for controlling risks. 

1. Risk reassessment

Risk reassessments involve the following activities:

• Identifying new risks
• Evaluating current risks
• Evaluating the risk management processes
• Closing risks 

2. Risk audit

Project teams may have defined risk responses. The question is—“Are the responses effective?” Project managers facilitate risk audits to examine the effectiveness of the risk responses and to determine whether changes are required. The team also examines the processes to identify, evaluate, respond to, and control risks.

3. Variance and trend analysis

As with many control processes, we now look for variances between the schedule and cost baselines and the actual results. When we the variances are increasing, there is increased uncertainty and risk. Watch the trends and respond before the situation gets out of hand.

4. Technical performance measurement

Imagine that you are working on a software development project and that the functional requirements have been developed. You’ve planned to deliver functions at a point in time—at the end of the fourth sprint, at the end of phase 1, or a milestone. The technical performance measurement is a measurement of the technical accomplishments.

5. Reserve analysis

During the cost planning, the contingency and management reserves are added to the project budget as needed. As risks occur, the reserves may decrease. Depending on how your organization handles reserves and your risk management plan, project managers may request more reserves when inadequate.

6. Meetings

Project managers should be deliberate risk managers. Engage your team members and appropriate stakeholders in meetings to facilitate the risk management processes. For these meetings, be sure to:

• Distribute an agenda with a clearly stated purpose
• Invite the appropriate team members and stakeholders
• Use appropriate tools and techniques
• Distribute meeting minutes containing decisions, action items, issues, and risks 

Don’t be like Tom who started his risk management with a bang and quickly fizzled. The best project managers identify, evaluate, and respond to risks. And they regularly perform the control activities to keep the project healthy.

Hey, before you go, keep in mind—you can't control risks until you first identify risks. Click here to discover 7 ways to identify project risks.

Do you find yourself working overtime, trying to deal with unexpected disruptions? Some negative events that you thought might happen has now occurred. And it's costing you more time and energy than you thought possible. Overwhelmed? Well, let's talk about project risks and issues, the differences, and why it's so important to manage risks.

The Project Management Body of Knowledge (PMBOK) defines risk as, “An uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives.” 

Let's examine a risk statement and underscore some key attributes of risks. Here's a risk statement:

Because the project team failed to review the requirements with the users, the project team may not meet the user's needs, resulting in unsatisfied users.

• Cause: Failure to review and validate the requirements
• Risk: Project team may not meet the user's needs
• Impact: Users will not be satisfied with the product

Notice the risk: project team may not meet the user's needs. Think of risk as events or conditions that might happen in the future.

Are we splitting hairs? The distinction between risks and issues matters for a few reasons.

• Proactive Management Saves Time. “An ounce of prevention is worth a pound of cure.” Project managers should manage risks proactively. Project managers can save valuable time through prevention. As often noted, Project managers can eliminate up to 90% of threats through risk management.
• Measure of Management Effectiveness. If a project manager is experiencing lots of issues, it may be a sign that the project manager has not been managing the project effectively. 
• Different Type Response. Issues require a different response than threats. Project managers respond to threats with different strategies: avoid, mitigate, accept, or transfer. Issues require corrective action to bring the performance of the project in alignment with the project management plan. 

While we are on this topic, let's clarify two other terms—assumptions and constraints.

• Assumptions. Assumptions are “a factor in the planning process that is considered to be true, real, or certain, without proof or demonstration” according to the Project Management Body of Knowledge. Assumptions may be a source of risks. Be sure to perform an assumption analysis periodically to validate assumptions.
• Constraints. A constraint is “a limiting factor that affects the execution of a project, program, portfolio, or process.” Constraints such as a budget or schedule constraints are factual. The project manager must continually consider these defined limits when managing risks, particularly when planning risk responses.

Do you have problems? Projects running behind schedule? Cycle time for a business process increasing? Sales down? People continuing to live in silos? Let's discuss a simple but powerful tool for solving problems - the Cause and Effect Diagram (alias Fishbone Diagram).

Steps to Create a Cause and Effect Diagram

1. Identify and clarify the problem. State the problem objectively. Ask questions concerning the problem. As Jack Welch said, “Continually expand your definition of the problem, and you expand your view of all the different ways that it can be solved.” Write out the problem or effect on the far-right-hand side of the diagram. Draw a horizontal line (the spine of the fish) to the problem.
2. Identify the cause categories. For example, use the 4 M categories: Machine, Method, Materials, Manpower. Add the categories to the diagram. Draw diagonal lines (bones of the fish) to each category.
3. Brainstorm causes for each category. Add causes to the appropriate category lines.
4. Identify the most significant causes.  Ask the team to identify the most significant causes. Remember the Pareto Principle - 80% of the problem comes from 20% of the causes.
5. Define the risk response plan. What can be done to eliminate or reduce the most significant causal factors? Who will be responsible for taking actions? When are the actions due? 

It's Your Turn

Some Project Management Offices (PMOs) never get off the ground. I've seen others that are started and a year or so later die a slow painful death. So, how can you build a PMO you can be proud of, one that thrives?

Why Are There So Many Troubled PMOs?

No one intends to build an impotent PMO, but it happens. The PMO lacks power and effectiveness. Therefore, people see the PMO as a hindrance, not an enabler.

Click here to discover 40 reasons PMOs fail. Furthermore, I describe how to handle PMO threats—things that may hinder your ability to build a PMO—here.

Let's look at five ways we can improve vitality and provide value to our organization.

How to Conduct Risk Reviews

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 helpful questions, check out my post 12 Questions For Monitoring Project Risks.

Your Turn

Pick one of your worst project, where things have been 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!