Known and unknown, internal and external, upside and downside—risks are woven into the fabric of every project. Project managers can waste a lot of time due to poor risk management. In today’s article, let’s look at seven things not to do when identifying project risks.
Dan the project manager just kicked off a new project, adding stress to his life. He was already managing three projects. Now he had a new team, new goals, new challenges, and yes, new risks.
If Dan was like most project managers, he would wait until later to start the risk identification process. Why hurry? He had enough to do without jumping into the risk management stuff.
However, risk waits for no one. In fact, the project risk exposure — the level of risk due to uncertainty — is highest at the beginning of projects. Why? We know the least.
Dan is smarter than most project managers. He starts identifying and capturing risks as he initiates and plans the new project. He proactively asks his team and stakeholders to help him identify the things that may hinder or help the project. His teams benefit from his early focus on achieving the project objectives.
Susan attended a risk management workshop. She was excited to learn about risk identification techniques such as brainstorming, cause and effect diagrams, interviews, and post mortems. She could not wait to use these new methods.
Susan did a great job of facilitating a risk identification session in her new project. Her team responded like champs. Susan felt a sense of great accomplishment. When the session was over, the walls were filled with cling sheets and sticky notes. She captured the risks in an Excel spreadsheet and sent the list to her team members.
Time marched on. And Susan turned her attention to developing a project schedule, developing a budget, working on a contract with a third-party vendor, and implementing a change control process. The project sponsor called several times wanting to discuss the project and make changes. The Information Technology Director stopped Susan in the hall to let her know that the testing resources would not be available for at least one month.
Increasingly, Susan found herself busy, reacting to problems and issues. She failed to work with her team to identify, evaluate, and respond to risks in a proactive manner. Susan eventually lost control of the project.
Some risks can only be discovered in the day-to-day project march. Like soldiers at war, we don’t see the real threats until we walk into enemy territory. Stay committed to the risk management process by capturing and discussing the risks with your team.
You’ve probably heard the song “Looking for Love in All the Wrong Places.” Well, some project managers look for risks in all the wrong places. Sometimes, we need help.
Think about it—we hire experts to help us identify and manage our personal risks. The pest control guy inspects our home for termites. Auto technicians inspect our vehicles looking for leaky hoses, loose fan belts, low fluid levels, and bad brake lights. We find the best financial advisors to help us invest wisely.
George, a telecommunications project manager, was assigned a construction project to build a customer service center. George had zero construction experience. So, he reached out to his friend Doug, who had more than 10 years of construction experience, to help him plan and identify risks. Doug shared a risk checklist with George and told him about the most common construction risks.
"Risk comes from not knowing what you are doing." —Warren Buffett
Beverly conducted an all-day risk identification workshop where she asked the team to brainstorm as many risks as possible. At the end of the day, the team had identified hundreds of risks; the team was glad to get back to their real work. Beverly proudly filled up her project binder with pages and pages of risks, most that were of little consequence.
Some project managers have a Buzz Lightyear mentality. When asked how far a project manager should go in identifying risks? You may hear, “To infinity, and beyond.” (How do you get beyond infinity?)
Just because someone identifies an uncertain event does NOT mean that it matters. I’m not certain where I will have my project meeting next week. Guess what? It doesn’t matter.
When identifying risks, I ask my teams to identify significant risks, things that may have a significant effect on the project objectives. The risk identification process takes less time and provides greater benefit. These project managers have better reputations too.
Jill wanted to save time; therefore, she assigned three people from her project team to help identify risks. Weeks later, Daniel, a key stakeholder, stopped by Jill’s cubicle to discuss the project requirements. A team member had shared the requirements specification with Daniel. As he reviewed the document, he saw errors, as well as missed regulatory requirements.
Project managers should seek to be good stewards of people’s time. But be sure to engage stakeholders in appropriate activities as well as in identifying risks.
Some project managers get into a rut by using the same risk identification technique such as brainstorming. Team members and stakeholders engaged in the iterative process often fall asleep at the wheel—their minds go on autopilot.
One way to shake things up is to use different elicitation techniques. But don’t use a different tool just to be different. Carefully select techniques that cause people to THINK differently.
For example, a project manager may interview stakeholders early in the project and perform a Delphi technique later. When developing the project risk management plan, the project manager can include their planned techniques.
There are known risks, and there are unknown risks. Less experienced project managers are happy to get the known risks captured in their risk register. Wise project managers dig deeper into the unknown.
They have inquiring minds. They continually ask, “What are we missing? What other significant things may help or hinder the achievement of the project objectives?”
Look for risks both internally and externally. Internally inspect documents such as the schedule management plan, cost management plan, and scope baseline. What risks exist from these plans?
Are there people risk, system risk, and process risk?
Externally, consider risks such as legal and regulatory risk, natural disasters, political risk, economic risk, reputational risk, and utility failure risk.
Share today’s article with another project manager and discuss how you each can improve your risk identification. Who can help you identify risks in activities where you have little experience? How can you spice things up with a different risk identification technique?
Question: What do you think is the biggest mistake that project managers make when identifying risks?
Risk Identification Checklist. Ninety percent of all project risks can be greatly reduced by simply identifying the risks. Grab this checklist and start identifying your project risks.
Bonus: I will send you a sequence of emails where I describe each of the seven risk identification techniques in detail.
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