The best of project risk management

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Project Risk Management: effective ways to identify and manage risk and deal with issues and crisis.

This is a collection of excerpts from the ProjectManager.com blog archives 2008 - 2013 presenting top tips and advice from our professional project managers in a "best of" series now available free to download and share.

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The best of project risk management

  1. 1. The Best of Project Risk Management A selection of professional insights from the Blog archive ProjectManager.com © 2013 All Rights Reserved 1
  2. 2. Since 2008 our project management professionals have been sharing knowledge,experience and learning with online readers via the Project Manager Blog.Their collective wisdom provides a wealth of how to, top tips and best practice advice,for project managers, teams and businesses.To make their writings more accessible we’ve created a series of “Best of” projectmanagement topics available free to download and share.Here is a collection of excerpts and insights from blog posts that discuss effective waysto identify and manage risk and deal with issues and crisis.Enjoy!Jason Westland CEOProjectManager.comWhat to do for a Project When Your Company is Sinking .......................................................................... 3A Five Step Approach to Issue Management .............................................................................................. 53 Critical Things for your Issues Log ............................................................................................................ 6Project Management Systems to Mitigate the Risk of the Arsonist/Firefighter ...................................... 10Risk Management and the Three Bears .................................................................................................... 13What’s Positive Risk on Projects?.............................................................................................................. 16Risk Management and Project Management Go Hand in Hand ............................................................... 19Why Project Managers Need a Risk Log .................................................................................................... 22Managing Project Issues ............................................................................................................................ 25What is Project Risk Control ...................................................................................................................... 25How to Plot Project Management Risk ..................................................................................................... 25High Risk Projects: How to Manage them ................................................................................................. 25How to Manage Stakeholders During Crisis .............................................................................................. 2530 Day Free Software Trial ........................................................................................................................ 26 ProjectManager.com © 2013 All Rights Reserved 2
  3. 3. What to do for a Project When Your Company is SinkingHere’s some simple advice to follow that is only four words long…be in the room. That’sit. You need to be in the room. That’s what you do for a project during tough times tomake sure it still gets done. What does this mean? Think about the chaos that ensues after a company may have gone through a rough patch and has to lay off a sizable percentage of their workforce. It’s like a rock that is thrown into the middle of the pond. The pond may be perfectly calm and serene and then the rock hits with a huge SPLASH! Water goes everywhere and the ripples begin to spread out from the center covering the entire pond.In a relatively short period of time, however, the ripples have become smaller andsmaller, the rock has disappeared and things begin to calm down and get back tonormal.The same thing happens in a company whenever there is a disruptive event such as alayoff. However, there are forces at work that are trying to minimize the impact of thesplash and the ripple effect. These forces that are at work assessing the situation,determining priorities, having meetings, and then making decisions.You need to be in those meetings. You need to be in the room as much as possibleduring these times so you know what to do for a project you may be concerned about. Itmay be lack of resources, lack of funding, lack of support, or a combination of all three.However, as much as possible you need to be involved in what is going on in regards toyour project. You need to be in the room.How to Be In the Room to Know What to Do For a ProjectThe following suggestions are something you can apply whenever your company hasgone through such an event as described above.1. Self-Manage: If you are going to wait around for somebody to tell you what to donext, you’re crazy. Don’t take it personally, but you and your projects are most likely nota priority right now. You’re an experienced Project Manager and you know what to do ProjectManager.com © 2013 All Rights Reserved 3
  4. 4. for a project. Now is the time to create your own path and not wait on someone else todo it for you. Find out what’s going and insert yourself into that mix. You certainly can’tbarge into a Board meeting that is occurring, but you can drop in on a conversation youoverhear in the hall or follow up on a rumor that you may have heard from two or threesources.2. Be at the Right Place at the Right Time: Part of self-managing is that you know whereyou need to be and when to get your job done. If all the action is occurring on the floorbelow yours, find a reason to visit that floor often. If you have multiple offices, and allthe action is occurring in another office, find a reason why you need to get to thatoffice. Don’t assume that anybody in this environment is going to come to you and askyour opinion. You need to be around to give your opinion about what to do for a projectyou are managing.3. Keep Your Head Down: We’re not talking about keeping your head down for fear ofgetting shot or being timid, but rather keeping your head down to stay focused on whatneeds to be done to move your projects forward. This allows you to make progress, gaintraction, and stay ahead of the curve once the dust settles.4. Don’t Wait for an Invitation to the Party: It may not be politically correct and even flyin the face of good manners, but this is the time you do need to crash the party. If youknow there is a group of people working on what you are interested in, don’t wait forthem to ask you to join them. You may need to even take this to another level. Theremay be certain people that DO NOT WANT YOU AT THE PARTY depending upon yourviewpoint and opinion of what is going on with the company. These are especially theparties you want to attend. Decisions may be made at these discussions and meetingsthat could adversely affect your project and you want to make sure you are in the roomto speak your mind.One more word of advice when it comes to what to do for a project when your companyis sinking has to be done prior to the tide going out. You need to attach yourself torevenue. Find those projects that bring cash into the company. Work on projects thathelp with the bottom line. Be associated with projects that have a high potential / lowrisk of being the next best thing…which ultimately will bring in revenue.It’s too easy sometimes to get in a comfort zone of working on a particular type ofproject. However, if you don’t take a moment to reflect on what the value of theseprojects are to the organization you may find yourself one of the first ones overboard. ProjectManager.com © 2013 All Rights Reserved 4
  5. 5. Continually ask yourself and assess your situation and ask “if a layoff happenedtomorrow, would the projects I’m working on bring enough value to the company tokeep me on board?” If not, start finding those projects that will. You obviously won’t beable to change your portfolio of projects overnight, but if you consciously make thosedecisions you will be in a much better situation when those tough decisions have to bemade.A Five Step Approach to Issue ManagementThe following five steps will help you with issue management and restoring balance tothe universe.1. Hear Them OutHear people out. Sincerely and attentively listen to their concerns. Don’t allow people tointerrupt each other. Everyone deserves an equal amount of time to express theirconcerns and work through their business management issues. Serve as the moderator.Stop people talking when you’ve heard the same comments repeatedly, and drawothers out that are not saying much.2. Serve as a TranslatorOnce you feel enough time has passed and people have had theopportunity to express their concerns, sum up what you heard anddo so diplomatically. Remove inflammatory words such as “younever”, “you always”, “you can’t” and “you won’t”.Acknowledge everyone’s concerns, remove the emotion, and focuson the facts. It’s all part of the issues management process. Factscan sometimes be elusive. You may need to dig a little harder, ask some clarifyingquestions, and throw some inaccurate statements out the window. Once everyonerealizes you are not biased toward any side but want to focus on the SOLUTION, theywill be that much more apt to deal in reality and get out of the emotional realm.3. Get Everyone on Common GroundNow that you have emotion-free facts to work with, your next step is to get everyone oncommon ground. A good place to start is that everyone wants the best for the company, ProjectManager.com © 2013 All Rights Reserved 5
  6. 6. does not want to negatively impact the customer and wants to keep some type ofnormalcy and not introduce chaos into their own departments. That’s a great place tostart in order to start talking about a SOLUTION.4. Develop a Solution with all StakeholdersWith everyone’s defenses and emotions down to DEFCON 5 and the realization that allhave more in common than they thought, you can now begin working on a solutiontogether. It’s amazing what will surface once tempers have cooled and calm headsprevail. Start connecting the dots, thinking outside the box or whatever form of businesscliché you would like to get the problem figured out.5. Follow-UpWork with the managers throughout the week to makesure they have what they need to implement the plan.Track and monitor the issues in your issue trackingsoftware. Give this your highest attention since it startedout as such a potential big deal. This will certainly comeup at next week’s PMO meeting as part of the issuemanagement portion of the discussion and be handledjust like any other issue. Use this as the benchmark forhow issues are handled on a going forward basis.Sometimes it is just not possible for you to know every single issue that is going on withyour projects as project manager. You have to have a lot of trust in people and yourteams to get their jobs done. No matter how hard you try, at times you may beblindsided. The trick is to stay calm, work through the process above and bring closureto whatever is negatively impacting the project. That’s what issue management is allabout!3 Critical Things for your Issues LogHowever much you plan your project, engage your stakeholders or mitigate your risks,things will never turn out exactly how you planned. Projects have too manyuncertainties and are affected by too many external and internal forces to go exactly toplan. As Helmuth von Moltke the Elder said, ‘No plan survives contact with the enemy’. ProjectManager.com © 2013 All Rights Reserved 6
  7. 7. When something that you haven’t planned for does happen, that’s an issue. Projectmanagers keep an issues log that is used to record all the problems, incidents anddisasters on the project and what they are going to do about them.Your Project Management Office may have a template that you can use, or your onlineproject management software may also have the feature to record and manage risksand issues. Don’t reinvent the wheel – use whatever template or tool you haveavailable. Whatever system you use, here are 3 critical things that should definitely beincluded on your issues log.1. A Description of the IssueOf course! You need a full description of theissue. This should include what has happenedand what caused it to happen (if you know).Describe the problem in a few sentences andmake a note of any risk it relates to – issues areoften caused by risks that suddenly materialize,although they don’t have to be.Your description should also cover the impact onthe project. Does this cause a big problem forthe team, or is it something that can be managedquite easily? Will it create a delay, or result in amilestone being missed? Will it cost a lot ofmoney to put right?Understanding the impact on the project will help you decide who is the best person tomanage it and what is required to do something about it.However, you don’t want to be describing the problem using a paragraph each time youmention it in conversation, so it is a good idea to have a short description of just a fewwords as well. This can become shorthand for the long issue description and helpseveryone realize what you are talking about. Creating a common language can alsocreate common understanding, so in day-to-day conversation, use the short description.For status updates, even the short description can be too much, so give all the issues atracking number as well. The format ‘I-001’ works well, and you can use the samenumbering system for risks (‘R-001’ etc) and changes (‘C-001’ etc). Then, when you are ProjectManager.com © 2013 All Rights Reserved 7
  8. 8. writing reports or referring to issues on status updates you can just use the number.Team members can refer to the log for the full description.2. An Owner for the IssueWho is going to be responsible for managing thisproblem? This is the issue owner, and this should alsobe noted down on the issue log. Online projectmanagement software often has the option ofassigning the management of an issue to a projectteam member, so you can automatically allocate it tothe right person to pick up the problem and work onthe resolution.Don’t be tempted to take on all the management ofissues yourself. While you may well have theknowledge and skills to be able to carry out the tasksrequired to resolve the problem, your role as projectmanager is to oversee the whole project.You may decide to keep the management of very significant issues for yourself so thatyou have the confidence that they are being dealt with in a timely fashion and so thatyou can report regularly to your stakeholders. You could also decide to keep yourself asthe owner for the most difficult ones, as this can shelter the project team membersfrom some of the organizational politics or challenging discussions. But generally, look atdelegating the management of issues to your team members.This can also be a great opportunity to build responsibility in team members and helpthem develop professionally. You can always support a more junior member of theteam, or ask their mentor, a more experienced project team member or their linemanager to help out as well.3. An Action PlanThe third critical feature of an issues log is the action plan: what you are going to doabout the problem. It is fine to have identified the issue and who is going to takeresponsibility for dealing with it, but what are they actually going to do? ProjectManager.com © 2013 All Rights Reserved 8
  9. 9. The action plan should cover the tasks required to resolve the problem. This could takea bit of brainstorming if the path for resolving the issue isn’t clear. You may have to havea separate meeting about how to tackle the issue, so you may not be able to log all theactions at the time that you are making the entry on the issues log.That’s OK: just write down that the first step is to do some detailed analysis andplanning and that a full action plan will be added to the log later.The issue owner doesn’t have to be the only person who has tasks allocated to them onthe action plan. Sometimes it is not appropriate for them to do all the tasks – andsometimes they can’t. Like the rest of the project, issue management is a collective effort. If the issue owner is not going to carry out all these tasks themselves then the action plan should also note who is going to do them. You can then allocate these tasks to the relevant project team members. The issue owner is responsible for making sure that the action plan gets done.Don’t forget that sometimes doing nothing is an acceptable course of action. If this isreasonable for the issue that you have logged, note down why you have decided to donothing.For example, the issue could have an unexpected benefit, so resolving it would becounter-productive. Or it could be caused by a change in local policy or legislation, andas a result you cannot do anything about it apart from re-plan around it.Issues log templates can include a lot more than this, but these are the three mostimportant things to make sure you record when you are logging issues on your project.If you know what the problem is, who is responsible for managing it and what they aregoing to do about it, and then you are well on the way to having a successful resolutionplan for your project issues. ProjectManager.com © 2013 All Rights Reserved 9
  10. 10. Project Management Systems to Mitigate the Risk of theArsonist/Firefighter There’s a very real phenomenon that occurs in the firefighter community called firefighter arson. There are a very small percentage of firefighters that will start a fire in order to put it out. Not as serious, but just as confounding, is the fact that there are arsonist/firefightersthat we work with every day in our corporate project management lives.You know the type of person. This is someone that will put something off to the lastminute, deliberately ignore something that needs to get done, and even send peopledown the wrong path intentionally.Why? Because this gives them the opportunity to sweep in and save the day whenthings really get off track! It’s frustrating to watch and something you quickly losepatience with as you see it unfold time and again before your eyes. Which begs thequestion, are there any project management systems that can account for an arsonist /firefighter within the project team?Why Project Team Members Risk the Success of a ProjectLet’s address the question of why somebody would do this before we dive into theproject management systems that could be used to manage such a person. Thefollowing are a few of the reasons why people will intentionally set a fire in theworkplace and then come in and put it out later:They feel like a hero: I’ve worked with a number of people that will deliberately putthings off until the last minute and create havoc and chaos around them. People arewaiting on deliverables that they are expected to complete and schedules are quicklyrunning out of time. Clients are getting nervous that they have not seen any tangibleprogress made on their project.Yet, the arsonist/firefighter deliberately chooses to work on other less pressing matters.Unfortunately, these are many times people in senior level positions that succumb tothis type of behavior. Why? Because they know that “crunch time” is soon to come. Itmay be the last month, week, day, or hours before the project is due and they then stepin and “take care of everything”. ProjectManager.com © 2013 All Rights Reserved 10
  11. 11. This is where the all-nighters and weekend work come into play. You come in the nextmorning and the firefighter/arsonist will be sitting there with a tired look on their longface. “Yeah, I had to stay here all night to get this done, but, it did get done”, theyremark stoically. Meanwhile you are pulling your hair out as a project manager becausethey have thoughtlessly inconvenienced the rest of the team and their projectmanagement systems and put the entire project at risk.They feel needed: Another reason why some people will become an arsonist/firefighteris that it makes them feel needed. When everything runs smoothly people may not feelquite as needed as when things are careening out of control. Project managementsystems may be in place that allows a project to move seamlessly from beginning to endwithout a lot of chaos. Everyone does their part and then moves on to the next task athand. The arsonist/firefighter has a greater need for recognition than most and willcreate opportunities that feed this desire to feel needed.They thrive on chaos: Yes, there are people that actually enjoy chaos. It goes againstevery fiber that a project manager has in their being, but some people do enjoy it whenthings are not going as planned. They like the feelings that are created from conflict,drama, misunderstanding, and things not going as planned. It keeps their mind occupiedand firing on all cylinders. They have to have a lot of noise and commotion around themat all times to heighten their performance levels. These are the corporate adrenalinejunkies that enjoy such extreme sports as “not telling the whole story”, “over promiseand under-deliver” and “I never said that” to name just a few. They like the fires thatthey set to be as large and hot as possible.Project Management Systems to Mitigate the Risk of theArsonist/Firefighter?There are a number of project management systems you can put in place as a projectmanager that will allow you to deal with the challenge of people that put the project atrisk.Preemptive Project Management: Preemptive project management systems areanything you put in place that will prevent this behavior from occurring. You only needto be burned once by the arsonist behavior to realize that it’s not a good experience foryou, the team and the client. If you know you are dealing with this type of person thenmake sure you anticipate what they are up to and head them off at the pass. For ProjectManager.com © 2013 All Rights Reserved 11
  12. 12. example, they may be procrastinating on getting a certain deliverable complete. You canmove the deadline up in order to move it through the process faster and let them knowthat it has to be done at this particular time. They can then go through their motions ofstarting a fire, but you still have your deliverable (and team) intact without too muchsurrounding drama. Ask Questions: Trust, but verify what they are saying. You may hear from this person that they are 98% of the way done on whatever they are working on. The problem is that they have been 98% done for the last 50% of the project! You need to put project management systems in place that will allow you to objectively drillinto the details and verify for yourself the state of each deliverable. You have beenburned too many times before by this person to allow something to go unverified untilthe last minute when you find out there’s a roaring fire blazing.Rely on Objective Reports: A third project management system you can put in place toprevent the arsonist/firefighter from striking are objective reports. These reports shouldbe designed to identify key deliverables and who is responsible for making thesedeliverables happen. Reviewing these reports in an objective manner each week at yourstatus meetings will uncover whether this person is really on track or if they are steadilyfalling behind with the caveat that they have things under control. This objective way ofmanaging someone that falls into the category of arsonist/firefighter is a great way tomake sure they are on track as well as provide them with an understanding of howmany other people are depending upon them to meet their date. ProjectManager.com © 2013 All Rights Reserved 12
  13. 13. Risk Management and the Three BearsEveryone is familiar with the story about Goldilocks and the Three Bears. Goldilocks isout for a stroll and happens upon a house. She knocks on the door, and since no-oneanswer she walks right in, in pursuit of perfection. The porridge, chair, and bed had tobe “just right”. Not too hot, not too cold, not too big, not too hard, and not too soft.You may wonder what this has to do with risk management. When it comes to riskidentification, reporting, and escalating risks on a project it has everything to do with it.A seasoned project manager will quickly let you know that terrible things can happen ifyou escalate either too early or too late on a project. You have to learn how to escalate“just right”. What Risk Management Process? Let’s discuss the spirit of risk management. Risk management is the art and science of identifying, communicating, and mitigating potential risks that could be associated with a project. This is where a risk management assessment and risk management plan will prove essential project management tools. For example, a risk that may present itself to a project is that certain resources necessary towork on the project may not be available if another project comes in before the one youare working on. It’s not certain that this could happen, but there is a definite possibilitythat this could occur.It is your job as a project manager to identify and articulate the impact this risk mayhave to your project. Risk management software can help assess the probability of risksoccurring and identify which risks will convert to project issues. What impact will thisrisk have on the project? Will it bring the project to a grinding halt? Or, will the projectbe able to quickly swerve and avoid this issue altogether as if the risk were never there?Once you have the answers to these questions, you now need to determine who needsto know this information. This is where the “art” of Risk Management comes into play. ProjectManager.com © 2013 All Rights Reserved 13
  14. 14. The Problem with Escalating Too EarlyThis is where the porridge is too cold. There may be arisk you have identified on the project that a certaindeliverable may not be delivered on time by one of theteams on the project. The probability of this eventhappening is about 50% and would have a mediumimpact to the project. So, there’s a 50/50 chance thatthis deliverable may be late and have a pretty seriousnegative impact to the project. The team responsiblefor delivering this part of the project has assured youthat they are doing everything they can to make up anylost ground and keep the schedule on track.You now have a tough decision making process to gothrough. You reflect on this particular team’s track record in the past and feel relativelycomfortable with their assurance that they can keep things on track. However, you alsoknow there have been times with they have completely missed the mark despite theirassurances. Plus, the impact that missing this date are pretty substantial on the project.You make the decision that it is a big enough issue to bring up at the next Project Statusupdate with the executive sponsor in attendance. The representative from thatparticular department now takes offense at the fact that you didn’t have enough faith inthem to get things back on track and felt the need to get others involved. This makestheir life harder with more scrutiny and additional checkpoints, requirements, andinterference from the higher ups. “How could you do this to us?” they ask.This is a reasonable question considering the circumstances. And, if you don’t have agood answer to this question you may find that your working relationship with this teambegins to quickly degrade. They will not be as forthcoming with information, nor asinclusive with you as they have been in the past feeling that you have “betrayed” them.This could end up in a pretty serious problem that takes months or even years to workthrough. The solution? Make sure you have your facts straight. You need to deeplyunderstand the risk and the associated impact it could have on the project. You need toclearly understand that what the team’s mitigation strategy is in order to feel confident(or as this case may be, not confident) in their plan. ProjectManager.com © 2013 All Rights Reserved 14
  15. 15. You also need to communicate with them on a regular basis as to your motivation forescalating on a potential risk. The last thing you want to do is throw someone under thebus, however, for the sake of the project this is something that needs to be done. Also,help them understand what happens if this risk is realized and you didn’t say anything.You are then faced with an entirely different set of questions and interrogatories as towho knew about what and when did they know about it.This is an extremely tough spot to be in. Ifyou escalate too early, there is really not agood way to prove whether a problemwould have occurred if you had not saidanything as you can’t prove a negative. That’s why this area would be consideredthe “art” of project management. The rightanswer is based upon years of experience,previous mistakes, and a high level of trustthat you have established with those thatwork on your project.The Problem with Escalating Too LateThis is where the porridge is too hot. A risk has now been realized and there has beenno indication that it has ever been brought up before. Now begins the onslaught ofquestions from managers and executives scrambling to figure out what went wrong. Theunfortunate part of this inquisition is that you are right in the middle of it. “Didn’t yourealize this was going to happen? Why is this the first time I’m hearing about this? Youdo realize we could have resolved this issue if we had known about it earlier? Now it’stoo late and there is nothing that can be done…” are all a typical line of questioning andconversations that will ensue once everyone realizes a risk has turned into a full-blownissue.Unfortunately, this is where even those who may have felt “betrayed” because youescalated on them too early in the first scenario may begin to recall things differentlythan you do. “Don’t you remember I told you about this being a potential risk about twomonths ago?” may be something that comes out at a project status meeting much toyour chagrin. ProjectManager.com © 2013 All Rights Reserved 15
  16. 16. What to do? You have to intimately and deeplyunderstand the downside of not reporting a riskthat may happen. You may feel as if you arehelping a colleague or teammate by not sayingsomething, but ultimately that approach canblow up in both of your faces. The fire drill thatresults in bringing things back on track after itblows up is time consuming, exhausting, andmany times unnecessary for everybodyinvolved.What’s Positive Risk on Projects?Risks – they are big, scary things that can disrupt our projects and cause no end ofheadaches. Plus we have to come up with mitigating strategies which means doing workfor stuff that might not happen anyway! No one likes doing extra work. It makes being aproject manager feel really negative at times, as we work away at trying to stop the badthings happening.“Taking a risk” is a seen as a bad thing that could lead to a poor outcome. You don’t takerisks like going skiing without the right equipment or eating puffer fish that has not beenproperly prepared. We don’t want to take too many risks with a project in case it allgoes wrong and the project ends up being cancelled or fails to deliver its benefits –which could have a detrimental effect on our careers. In our personal lives as well as ourprofessional lives, risk taking is something to be carefully considered before we dive in.Just in case.Risks can be good!Unfortunately, we’ve all been conditioned tothink of risks as negative. The risk of goingskiing without the right kit is that you will fallover and break your leg, ruining your holidayand having to rely on your friends and family tomake you cups of tea while they would ratherbe out on the slopes themselves. ProjectManager.com © 2013 All Rights Reserved 16
  17. 17. But what if we could turn that around? What if taking that risk meant discovering awhole new way of skiing that started a fabulous new trend and saved people lots ofmoney on their ski holidays?Risks can have positive outcomes, both in our personal lives and on our projects. Atwork you will sometimes hear this type of risk called an opportunity.Types of Positive RiskPositive risks can take a number of forms but they can be hard to uncover because ourbrains are so conditioned to think of risks as bad. The easiest way to identify positiverisk is to do it the same way as you would the negative risk. Work with your team tocome up with a list of opportunities that could impact the project. Brainstorm all thegood things that could happen. These could be things like:  Receiving so many calls about our new product that we make more sales than we anticipated.  Winning a new deal because of our great project management skills.  Selling more copies of our software than we thought, meaning the warehouse is swamped with orders.  Getting 10 times more hits on our website than we planned for, due to great publicity.Once you have identified all the risks that would have a positive impact on your project,you can think about how you will respond them.Ways to Respond to Positive RiskThere are 4 ways to respond to positive risk. These are your risk response strategies,and they are a bit different to the types of response you would use to deal with negativerisk.Exploit the risk. Exploiting a risk means that you do everything you can to increase thechance of it happening. For example, if you want to get more hits on your new website,spend lots of time drumming up positive publicity by contacting journalists, writingpress releases and getting your in-house communications team involved.Share the risk. Sometimes you can’t get the full benefit of an opportunity workingalone. For example, if you want to make sure that the warehouse is ready to cope with ProjectManager.com © 2013 All Rights Reserved 17
  18. 18. all those orders, work with that team on the order process. You could put in place a just-in-time shipping process so that you don’t have too much stock lying around, but that itis available at short notice when customers need it. Your project benefits by customersbeing able to get their hands on the product quickly and the warehouse team benefitsfrom not having to deal with too many orders that are difficult to fulfill at any one time.You can even collaborate with competitors, if that is of benefit to the industry overall. Enhance the risk. This means trying to establish the root cause. Then you can influence it, again to increase the likelihood that it will happen. For example, if you want to increase the chance of winning that new deal, you will need to make sure that your whole team has excellent project management skills. You can increase the chance of winning the deal by organizing training, getting involved in industry events, raising the profile of your team members in the industry and so on.Accept the risk and do nothing more. This is always an option for negative risk too. Yousimply say that you know it is a possibility and that you don’t intend to do anything tobring it about. If it happens, it happens, and you’ll deal with it then.Managing Positive RiskManage positive risk in the same way that you would manage negative risk. You can useyour online project management software to record risks and the action plans that gowith them. Remember to allocate an owner to the risk, add a date that the risk was firstnoted (your software may do this for you) and any follow up actions that happen. Buildup your risk log with all this information – you don’t need a separate risk log for positiverisk. Use the same one as you do for recording your other risks.Regularly go back through your positive risks and check their status. Are they more likelyto happen now? Less likely? How effective have your action plans been? What can youdo now to make any improvements? Keep your software risk log up-to-date with thelatest status and actions, as this will also be useful when you come to review the successof the project in a post-project review. ProjectManager.com © 2013 All Rights Reserved 18
  19. 19. Risk Management and Project Management Go Hand in HandThere are an innumerable amount of things that go can wrong on any project at anymoment in time. It’s up to you as a project manager to be aware of these potential risksand do all that is within your power to mitigate those things that could possibly causeyour project to veer off track.What Increases the Amount of Risk on a Project? There are a number of factors that come into play when it comes to predicting the amount of exposure your project has to risk. For example a risk management assessment should consider: New Technology– If the project you are managing uses a new form of technology then there is a greater amount of risk that can surface on your project. New technology isgreat. New technology can reduce the amount of time it takes to do something, reducethe number of people that may need to work on a project, or automate previouslymanual tasks. New technology is even better once all the bugs are ironed out. If yourcompany has an “early adopter” mindset and you are first in line to try something new,then you can anticipate a greater need for information risk management.Low Experience Levels – Risk management and project management skills will come tothe fore if the type of project you are working on is new to you or your organization. It’snot that you don’t have a team of skilled and talented people that are doing the work.It’s just that the type of project that is being worked on is new to your company andmay push the envelope a bit. There is greater room for mistakes to be made or setbacksto surface.Lapsed Time – If your risk management and project management plan was put togethera considerable amount of time before the project kicked off, then you will also beexposing yourself to higher risk. There are many things that can come up between anoriginal kickoff meeting and actually starting to work on a project. For example, ProjectManager.com © 2013 All Rights Reserved 19
  20. 20. something that seems to happen regularly these days is that one company is bought outby another company. If the project kickoff meeting was done prior to this buy-out andthen six months pass before the project actually begins, your project will be at a greateramount of risk.Long Projects – Longer projects (6+ months to years) are always going to be exposed tomore risk by the fact that they are around that much longer. Quick, short projects thattake weeks or a few months to complete can keep their momentum and trajectorypretty consistent. Long, complicated, and unwieldy projects that span large amounts oftime open for the door for increased focus on risk management and projectmanagement. Simply put, there is more time and opportunity for something to gowrong. If you have the dubious distinction of working on a long project that is running 6months behind with a team that has never implemented a brand new technology…thenhold your breath. You might be getting ready to jump off the Eiffel Tower!5 Steps to Keep Risk Managementand Project Management TogetherRisk Management and project managementare joined at the hip. Risk management isarguably one of the more important disciplinesof the project management profession. Why?Because, the goal of a project manager is toget a project done on time, in scope, and onbudget, a risk management plan is required.The nemesis of every project manager is Risk. Risk exists to introduce elements into aproject that can turn into Issues that will ensure a project is not done in time, is out ofscope, and over budget. How can you prevent this from happening? Follow the fivesteps below to ensure your project completes successfully.1. Risk Identification – Gather the team together to identify as many risks or things thatcould go wrong on your project as possible. Just have everyone call them out no matterhow small, insignificant, or far-fetched a potential risk may seem. You’ll worry aboutcategorizing them later. It is best to keep this running-list through a projector on thewall or on a whiteboard so everyone can see the list building. How do you know when ProjectManager.com © 2013 All Rights Reserved 20
  21. 21. you are done? When the momentum of risks that are called out begins to slow downand you begin to hear variations of similar only risks.Your role in this meeting is to dig deep and extract as many risks as possible. Don’t becontent with just the obvious ones on the surface. Make sure everyone has thought longand hard about what could go wrong and brought those up.2. Risk Categorization – Now that you have your list of risks properly identified, youneed to begin to prioritize them as to how they will impact your project. The best way todo this is to look at two areas. First, what is the likelihood that this particular risk willoccur? If it’s highly likely, then assign it a ‘1’, if it’s highly unlikely, then assign it a‘3’.Next, determine what impact will this have on the project if it does occur. If theresults would be devastating, give it a ‘1’. If the results would have minimal to noimpact, give it a ‘3’.3. Risk Mitigation – At this point you will have a prioritized list of risks that are likely tooccur and those that could have the greatest negative impact on a project. Now you canstart putting a mitigation plan in place to do everything possible to avert those risks, orto come up with a plan to deal with the risk if it does come to fruition. Start with thoseitems that have a high probability of occurring and have the highest potential negativeeffect on the project.4. Risk Monitoring – When you are dealing with risk management process and projectmanagement you do not have the luxury of “set it and forget it.” It’s not possible to putthe initial list of risks together, prioritize them, and then walk away without thinkingabout them again. You must constantly monitor those aspects of the project that couldpossibly cause delays or make you miss your targets. A portion of your weekly statusmeeting should be devoted to discussing risks and risk mitigation strategies.5. Risk Communication – Finally, keep anyone and everyone that could be affected bythe risks on your project up to speed on where things stand. Let them know ifcircumstances changed that make the risk more likely to occur. Or, perhaps something isno longer considered a risk and it is taken off the list of things to worry about.Risk communication is especially important if the risk occurs and has now converted intoa full-blown issue. You need to let everyone involved know what is being done to makesure the project gets back on track. ProjectManager.com © 2013 All Rights Reserved 21
  22. 22. Why Project Managers Need a Risk LogRisk management is one of the areas of project management that gets overlooked,often because it can be quite tedious to do. However, you do risk management everyday in your non-work life. What’s the risk of rain, shall I take an umbrella? What if weget stuck in a traffic jam? Let’s take an alternative route and pack some snacks and adrink for the car. What if the children are bored while we are out? Put a couple of extratoys in your bag. We manage risks like this all the time, working out the mostappropriate mitigating actions and putting plans in place to achieve them.So, if we do risk management all the time, why do so many project managers fail to havea good risk log? Especially as they are so easy to put together, once you have an initialmeeting to discuss risk with your project team. Here are 5 reasons why you need a risklog on your project. 1. A Risk Log Helps You Plan Having a risk log helps you schedule activities in the most appropriate order. For example, most risks that you identify will require some action to mitigate them. Mitigating actions are those that help you avoid the risk happening in the first place. In the case of trying to avoid rain, there’s not much you can do about that, but if you want to avoid traffic jams, you could take an alternative route. That wouldbe a mitigating action.On your project, you will have to plan the mitigating actions. Some may be quite quickand easy to do. Others may require a lot of planning and doing and that will take teammembers away from the other project tasks. You will have to take this into accountwhen you plan the activities for your team – don’t expect them to be able to managetheir ‘normal’ project tasks from the schedule and take on risk mitigation activities aswell. ProjectManager.com © 2013 All Rights Reserved 22
  23. 23. Use your risk log to identify the mitigating actions required and schedule them into youronline project management tool so you that have a complete picture of the workrequired for the team.2. A Risk Log Helps You PrioritizeOne of the functions of a risk log is to capture all the risks to the project in one place.That’s great, but you also have to prioritize them. Which risks are going to cause you thegreatest pain on the project?Rank your risks in priority order so you know which ones to focus on first. You can alsoprioritize by date, making sure that you spend time on the risks that were identifiedearly in the project. The longer they are a project risk, the more chance there is thatthey will interrupt the project somehow!Remember that risks come and go, so when a risk has passed, take it off the log, or atleast mark it as closed. This allows you to focus on the risks that are still a threat – don’twaste time prioritizing actions to address things that have already been and gone.3. A Risk Log Helps You BudgetYour mitigating actions are likely to incur costs, even if it is just the cost of the projectteam working on them. Look through your risk log and work out how much it will cost tomanage each risk effectively. Then you can add these costs to your project budget.Of course, you might find that it is too expensive to manage all the risks in the way thatyou want, which is where your prioritization activity comes in. Distribute your availablefunds to the risks that have the highest priority.See if you can identify positive risk as well. These are risks that don’t cause problems butdo deliver benefits, such as the additional revenue that would result in delivering early,if you could ship your product ahead of the forecasted project end date. This type of riskcould have a positive implication for your project or business case.4. A Risk Log Helps You Allocate ResponsibilityAnother feature of a risk log is the risk owner. This should be a separate column or fieldin the log, and it should always have a name in! Someone has to take responsibility formanaging the risk, even if they don’t end up doing all the work themselves. ProjectManager.com © 2013 All Rights Reserved 23
  24. 24. Make sure all your risks have an owner allocated. Documenting risk ownership in thisway can really help people see what they are responsible for. It makes it easier for youto track progress as well, as you will always know who to ask for a status update. Try toavoid having yourself as the risk owner for all the risks – while it is sometimesappropriate for the project manager to take responsibility for managing a risk or two,you are likely to have a lot of other things to do and you can’t actively manage them all.It can also be a good opportunity for a more junior member of the team to take adegree of responsibility, so use the chance to delegate if you can.5. A Risk Log Helps You Manage the ProjectFinally, your risk log will help youmanage the project. Risk is inherent inall the projects we do, but you have amuch better chance of success if youidentify the potential problemsupfront and then work with yourteam to address them.Remember that you can’t do riskmanagement alone. It starts with riskidentification, and there is no waythat you have enough knowledge about all the specialist areas of the project to be ableto accurately identify the possible pitfalls. Having a discussion with your team is the bestway to identify risk. You can also include a section on risk management in each of yourteam meetings, so managing the project and the risks becomes inseparable. You’ll havefar more chance of getting your project completed efficiently and effectively if you worktogether to handle risk management.These are five reasons why you need a risk log on your project, although you canprobably think of more. If you are convinced, why not start your risk log today? Get yourlog template sorted out and then call the team together for a brainstorming session tosee what risks you can identify! ProjectManager.com © 2013 All Rights Reserved 24
  25. 25. Managing Project IssuesLearn how to manage project issues with these seven steps to success. These sevensteps are part of a best practice issue management process and are the core essence ofproject management. http://www.projectmanager.com/managing-project-issues.phpWhat is Project Risk ControlProject risk control is critical to project planning. Watch this video to learn more aboutthe requirements of project risk control from a project management expert.http://www.projectmanager.com/what-is-project-risk-control.phpHow to Plot Project Management RiskWatch this video to learn how to implement risk management tips for your projects andimprove your rate of success.http://www.projectmanager.com/how-to-plot-project-management-risk.phpHigh Risk Projects: How to Manage themHigh risk projects are fast-paced and exciting to work on. Watch the following video andget all the tips on how to manage a high risk project…http://www.projectmanager.com/high-risk-projects-how-to-manage-them.phpHow to Manage Stakeholders During CrisisIf you get into a project crisis, then use these tips presented by Devin Deen, ContentDirector at Projectmanager.com to help manage your stakeholdershttp://www.projectmanager.com/how-to-manage-stakeholders-during-crisis.php ProjectManager.com © 2013 All Rights Reserved 25
  26. 26. 30 Day Free Software TrialThere are two key differences between ProjectManager.com and its competitors.The first is that we give you all of the features you need to plan, track and report onprojects efficiently. The second key difference is that our competitors charge a highupfront price as well as annual maintenance fees for new releases.Here at ProjectManager.com we offer you all of the features you need to manageprojects, at a small monthly price of just $25 per user. That simple! When you sign up toProjectManager.com, you also get for free: Unlimited Projects 3 Gigs of Document Storage Client Login Free Upgrade to New ReleasesTake Action, Sign-Up for a 30 Day Free Trial Today! Take a Free Trial Create your own Projects Sign up to boost your project successAny questions? Email support@ProjectManager.com andone of our friendly support staff will be happy to help. Wealso recommend a visit our resource library if you wouldlike access to further:-  project management tips  video tutorials  project management templates ProjectManager.com © 2013 All Rights Reserved 26

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