If you say the word “risk” to ten people, each person may think of something different— insurance, threats, investments, bets, or potential loss. As we manage project teams, it's critical that you and your team members have a common understanding of what project risk means. Otherwise, people will be confused by your risk management efforts.

It is no wonder that there is so much confusion about the meaning of risk. Many credible sources provide conflicting definitions. The Merriam Webster dictionary defines risk as “the possibility of loss or injury: peril.”

Risk management standards, guides, and methodologies define risk in many different ways. Some include the possibility of positive risks or opportunities; others do not.

As projects start, project managers should work with the project sponsor and key stakeholders to clarify the project objectives or goals. Once the objectives are clear, share how risk management can help to achieve the objectives. Furthermore, provide concrete examples that are relevant to the project at hand.

Next, agree on a definition for project risk. I suggest the risk definition from the Project Management Institute’s Project Management Body of Knowledge (PMBOK).

So, here is the PMBOK definition of risk - an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives (such as scope, schedule, cost, and quality). Let’s break down this definition of risk:

• Positive effect. When I share the PMBOK’s definition of risk, I ask if anything seems strange about the definition. Many people say it seems odd that risk can have a positive effect. I provide examples of how “opportunities” or up-side risks can help achieve the project objectives.

• Negative effect. I do not normally have to spend much time on the negative effect. This is how most people think of risk. I introduce the term “threat” for the downside risks.
• Project objectives. To bring value to the risk management processes, keep your teams focused on project objectives such as scope, schedule, cost, and quality. The heart of risk management is helping your sponsor and team to achieve their objectives.
• Minimizing the use of the term risk. Because the term “risk” is often misunderstood, I use the terms threats and opportunities more often. If I am leading an exercise to identify risks, I will ask the participants to identify threats or potential problems first. Then I ask the participants to identify opportunities or potential benefits to the project.

Some people argue that including positive effects in the definition creates confusion. If you decide to leave out the positive effects in the definition, consider how you and your team can identify and seize significant opportunities.

The important thing is to discuss and get agreement with your team about how to define risk. Include the definition in your Risk Management Plan. Clear communication will position your team for greater achievement.

The best-laid plans of mice and men oft go astray. Why? Individuals, teams, and organizations lack the healthy habits of identifying and managing the uncertainty that surrounds their world. Today, let's look at a step-by-step process to improve your strategic planning, analysis, and alignment with a particular focus on risk management.

Strategic risk management is a process for identifying, analyzing, and managing risks most critical to the achievement of your goals. While many individuals, groups, or organizations perform risk management informally, a more structured approach has its benefits. For instance, strategic risk management can help you invest your precious time, money, resources and energy where it counts most.

Strategic risk management may be applied to enterprise, portfolio, program, and project levels of an organization. 

So, here is a step-by-step process to help you improve your strategic planning, analysis, and alignment.

In the broadest sense, strategic risk management starts at an enterprise level. Even if your organization does not have an Enterprise Risk Management (ERM) Program, you can apply this process to improve your portfolio and program risk management. Lastly, if you only manage projects, consider this process as the context for your projects. Do you understand how your projects align with the organizational vision, mission, values, and goals?

1. Define the Vision, Mission, and Values. What is your preferred future? What is the purpose of your organization? What do you value?
2. Define Long-Term Goals. What are the long-term goals (typically 3 year goals) to support the mission? These goals will likely be broader than your annual goals.
3. Define Annual Key Performance Indicators (KPIs). What will you measure? For example, you may have a KPI for profit or expenses. What is the target for the KPI? How do you calculate the KPI?
4. Define Annual Goals. Using the KPIs, we can define specific, measurable goals. For example: “To increase profit by 5% over the prior year by 12/31/XX.” Cascade the goals. Lower level goals should align and support higher level goals. For example, you may have a hierarchy like this:
   • Corporate Goals (i.e. Enterprise Goals)
     • Business Goals (i.e. Business Unit or Division Goals)
       • Functional Goals (i.e. Department Goals)
         • Team Goals (i.e. Project Goals)
5. Define Strategy. How will you get from your present state to the desired future state? Strategies may include action plans, projects, and programs.
6. Identify Risks. Here is where risk management comes into play. What are the opportunities and threats for each goal? Who are the risk owners?
7. Analyze Risks. What is the priority of the risks? Which risks matter most? At a minimum, complete a Qualitative Risk Analysis to prioritize the risks. In some cases, you may wish to complete a Quantitative Risk Analysis.
8. Plan Risk Responses. Develop the risk response plans for the highest risks.
9. Build a Scorecard. Develop a scorecard where actual results are reported for each of the goals. Determine the frequency of reporting (e.g., monthly, quarterly, bi-annual, annual).
10. Monitor Risks. Periodically review the risks. Update assessments and response plans as needed.

You may be thinking—interesting article. But I want you to be more than interested. I challenge you to take action, particularly if you are an enterprise, portfolio, or program manager. Develop your strategic plan, identify your risks, and start managing those risks. Most importantly, add value by keeping your eye on the achievement of your goals.

Occasionally, someone will ask me for risk management tips. I think my first answer surprises individuals—write clear goals. Yes, good risk management always starts with clear goals. In today's article, I will give you a simple method to write clear goals every time.

The Crow and the Pitcher is one of Aesop’s Fables. In the story, a thirsty crow discovers a pitcher with water at the bottom, beyond the reach of its beak. The crow did not have sufficient strength to push the pitcher over. He took a different approach. The bird dropped pebbles one by one in the pitcher until the water level rose to the top of the pitcher, allowing the crow to drink.

The crow had a clear goal. Though there were obstacles, the crow creatively solved the problem and achieved his goal. In risk management, we ask ourselves—what may help or hinder our ability to achieve our goals.

Allow me to provide a simple but powerful formula for writing goals. What I am about to share will work for personal goals, enterprise goals, department goals, team goals, or any goal. Furthermore, it works for long-term goals, intermediate-term goals, and short-term goals.

Using this goal formula, you will write specific, measurable goals every time. You will find writing goals easier. Let's start with the formula.

Verb -> Focus -> Target -> Deadline

Example: Increase new members 5% by December 31, 20xx.

1. Verb. I typically start goals with a verb such as increase, decrease, maintain, or have. (I use verbs like implement, develop, establish, utilize, or revise for strategies, broad statements of direction.)
2. Focus. What is the focus of the goal? The focus of the example above is "new members."
3. Target. The target specifies the measure. The target may be a specific amount, range, or percentage.
4. Deadline. The deadline makes the goal time-based. A goal without a deadline is simply a wish.

Writing goals is an iterative process. Zig Ziglar said, "Don't become a wandering generality. Be a meaningful specific." Write your goals again and again, each time refining and clarifying your thoughts. Revisit them regularly to monitor your progress.

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.

Have you ever conducted a project brainstorming session and found yourself drowning in a cloud of ideas? Not a bad thing, but how can we make sense of the ideas? Well, let's see how to create a project affinity map to sort your ideas. As a bonus, we'll also look at Dot Voting, a simple and quick way to prioritize your ideas.

So, what steps do we take to create an affinity diagram? Let's walk through the process.

1. Define the issue or the question on a whiteboard or flip chart. For example: "What ideas do you have to expedite our project?" Or "What is causing the quality issues in our software project?"
2. Ask participants for responses. Have the participants write their responses on sticky notes or index cards.
3. Collect and post ideas.
4. Sort the ideas into columns or clusters. Ask the participants to help you sort the ideas into common groups.
5. Define categories. Ask the participants to define category names or headings.
6. Discuss the Affinity Map. Ask participants for key observations. Ask probing questions to help everyone better understand the results.

When you complete the exercise, the team should have a deeper and more comprehensive understanding of the issues. Sometimes the team may need additional help to identify the most significant items. Let’s look at another simple tool to prioritize the items.

1. Determine what to vote on.
2. Give the participants a number of votes. I give participants 5 sticky dots.
3. Give guidelines for voting. For example, participants may cast one or more votes for any one idea. Participants may cast all of their votes for one idea if they feel strongly enough about the idea.
4. Ask participants to cast votes. Participants cast their votes by putting their dots on the sticky notes.
5. Total votes. Count the dots and declare the top items.
6. Discuss the results. Are most of the votes in one category? What are the top 3-5 ideas?

The Affinity Map and Dot Voting provide a powerful one-two punch. You and your team will be able to sort and prioritize the ideas in a quick and organized manner. Give it a try!

Someone decided that it was a good idea to bring project management into your organization. Perhaps it was your CEO or operations manager or IT Director. But for some reason, it never took off. Project management has not been supported by your culture. Let's look at how to get things in flight with a project steering committee.

What's the Current State?

Start with an evaluation. Here are some questions to aid you in discovering the deeper issues. Interview your stakeholders to get their feedback.

• When your organization introduced to project management, what were the problems project management was to address? If the problems have not been addressed, what is it costing you right now?
• What's working well?
• What's not working?
• How can we get more value from project management?

Initiate a Project Steering Committee

A common denominator in challenged projects is poor communication. What are the results? Stakeholders make bad assumptions. Team members don't trust one another. Work has to be redone. Let’s look at ways to improve our communication by overcoming five bad communication habits.

Busy Billy reviews the project charter to his team and other stakeholders in the kick-off meeting. Then he moves on to other project management tasks and never mentions it again.

We all develop habits, some good and some bad. Are you one of those people who largely communicates in only one or two ways such as email and phone.

How often have you attended a project meeting and left mumbling—what’s was that all about? Many meetings are a complete waste of time. Why? Little thought in the planning.

In my project management workshops, I ask this question, "What are the top causes of project failure?" Nine times out of ten, I hear the answer—poor communication. Hence, let's look at how to improve your project communication.

Here's the bottom line -- poor communication drives projects into an abysmal valley. Your reputation is marred. The cost of your project spirals out of control. Heck, your team may even abandon ship.

7 Attributes of Great Project Communicators

If you want to improve your communication, consider these powerful attributes of great communicators:

1. Intentional. One of the best ways to improve project communication is through the development of a communication plan. Who do you need to communicate to? What should be communicated? When will the communication occur? How will you communicate (e.g., face-to-face, email, presentation, meetings)? Why is it important? Click here for a communication plan template.
2. Clear. The best project managers are clear. Put yourself in the shoes of your stakeholders. What can you do to ensure clarity in your messages? Most noteworthy, lead by communicating in simple and clear terms.
3. Relentless. Some project managers start out with a blast, communicating wonderfully. Somewhere along the way, they lose their steam. The project manager gets busy and fails to distribute minutes or fails to tell the developers about decisions to change the requirements. In contrast, the best project managers have a healthy habit of reviewing and updating their communication plan regularly and relentlessly executing the plan.
4. Unforgettable. Your stakeholders are bombarded daily by information — advertising, emails, tweets, messaging, podcasts, and videos. What can you do to stand out? How can you communicate in a creative manner that catches your stakeholder's interest and keeps them coming back for more? For example, I once saw a quality assurance manager and her testing team dress up like bugs and invited team members to throw water balloons at them to celebrate a milestone in the number of bugs (i.e., software defects) that they found.
5. Wise. One of the best things that a project manager can do is review the lessons learned from similar projects. What were the communication issues? What decisions were made? How were they made? What were the results of the decisions? There's no need to make the same mistakes of prior project managers.
6. Honest. One of the most important attributes of a leader is honesty. People want to know that they are dealing with someone who is trustworthy and has their best interest in mind. Don't shade the truth or hide information intentionally. Furthermore, look for ways to be as transparent as possible.
7. Harmonious. Finally, most of our communication comes through our body language such as facial expressions and gestures. Speech and tone of voice are also key. Want to enrich your communication? Make sure your words, body language, and speech are in alignment.

Secure a Communication Mentor

None of us are perfect communicators. We are blind to our bad habits. For years, I had a habit of looking up and away from the person to whom I was speaking. Why? I was thinking about how to solve the problem we were discussing. I was unaware of how this behavior was annoying others.

We don't know what we don't know. So, how can we discover our communication issues?

Ask a trusted mentor or friend to provide feedback on the communication strengths and weaknesses. What do you need to work on? Your writing skills. Your public speaking skills. Listening.