What would you do if all hell breaks loose in a critical company project that you are managing? You lose two of your best team members. Your budget is shot. A key stakeholder is breathing down your neck. Behind schedule by four weeks. You haven't slept well in two weeks. And you feel like throwing in the towel.
Taking on Risky Projects
Some projects are more risky than others. A project sponsor sees an opportunity. It's a stretch, and he knows it, but he wants to try anyway. So, the project charter is completed, and the top risks are recognized.
The Project Board approves the project. Why? Because there will be tremendous gain if the project is implemented successfully.
And guess what? You've been asked to manage this project. Lucky you.
As you are engaged in the project, you begin to understand just how challenging the project is going to be. How will you approach the uncertainty that lies before you? What can you do to recognize and plan for the events and conditions that may have negative effects on your project objectives?
Engage Your Key Stakeholders
When entering a high-risk project, plan your worst-case scenarios. Project managers don't have a crystal ball to tell the future. But we can identify our top risks and look a combinations of those risks occurring. It won't be exact and that's fine. The important thing is to engage your sponsor and key stakeholders.
Facilitate the risk workshop to gain a better view of the overall project risks and how you might respond under different conditions.
Developing Worst-Case Scenarios
Imagine that you have a risk workshop with nine participants, including your project sponsor and subject matter experts. Divide the participants into three groups and share your risk register (see an example below). Ask each group to select 3-4 risks that might actually occur in the project.
Risk Register Example (Qualitative Risk Analysis)
Next, ask each group to develop risk response plans. How would we respond if that scenario occurred?
Ask each group spokesperson to share their scenario and the responses.
Imagine that Group 1 picked A, D, and F for a total risk score of 65. Group 2 chose A, B, and D for a total risk score of 60. And Group 3 selected A, B, D, and F for a total risk score of 80.
Remember, the important thing here is to engage the stakeholders, obtain their input, and have everyone working together to plan the risk responses.
Analyze Your Worst-Case Scenarios
When I conduct these workshops, I review and analyze the risks chosen. Which risks were selected most frequently? Which scenario had the highest total risk score (or total expected monetary value if the risks were quantified)? What were the most common response strategies?
There is an upside to downside events and conditions. It forces people to think and act in new ways. —Harry Hall
How to Respond to Overall Project Risk
Develop a Response Plan for Overall Project Risk
I like to think of the project sponsor as the project's chief risk officer. This individual has overall accountability for the project. Therefore, the sponsor has the final say on how risks will be handled according to their risk appetite and tolerance. Where the project manager oversees the individual project risks, the sponsor oversees the overall project risk.
So, the sponsor could develop an Overall Project Risk Plan that might look like this:
1. Use management reserves for unknown risks as they occur.
2. Use contingency reserves for known risks as they occur.
3. Develop team member incentives if the project is successful per the defined success criteria in the project charter.
4. Decrease the project scope after milestone #3 if the team is more than three weeks behind.
5. Cancel the project after milestone #5 if the team is more than four weeks behind.
"Without counsel plans fail, but with many advisors they succeed." Proverbs 15:22
So, what do you do when all hell breaks loose? Execute the overall risk response plan that was developed with your sponsor and key stakeholders. Yes, this takes time and effort. But, consider the benefits.
First, this process provides a well-rounded and more comprehensive look at your threats. No one person can identify all of the significant risks.
Second, this allows several people to shoulder the responsibility of risk management. While the project manager may facilitate the process, risk management is everyone's responsibility. And the project sponsor is your chief risk officer.
Third, this type of project can be a career breaker or enhancer. Taking advantage of your key stakeholders' collective wisdom and experience provides you with keen insights. Put aside your pride; ask for help. If you do, you will significantly improve your chance of success.