Most project managers don't
really bother about risk management. If you are one of those project managers,
read on. Your project needs an airbag. You need to buckle up your project seat
belt.
Projects are like cars, they
are inherently uncertain and risky, because:
* Each project is unique, you've
never done it before.
* Your project has a one-off
team, who have never worked together
* Your project is delivering
change (and that's hard and innovative)
Project managers try to
manage uncertainty with a plan. A
plan is your road-map into that uncertain future.
But most project managers are
optimists. Your optimism can generate an over-optimistic
plan. So each time you plan, you should perform a risk analysis, and bring
that over-optimistic plan back to
reality.
Here's
how to do a risk analysis.
You need a flip-chart or
white-board. Draw a table with 5 columns, marked
· Risk
· Probability
· Impact
· Danger
· Response Action
Step
1
is to brainstorm the risks. You should do this as a small team exercise - ask
one or two project team members to join you.
During brainstorming, you collectively
generate negative ideas, for perhaps 10 or 20 minutes. You invite pessimism,
and even criticism. Don't filter the risks, don't discuss them. Every risk goes
straight onto the flip chart or the white-board.
Step
2
is to estimate those risks, one by one, using two criteria
1. Probability, from 1 to 4 (where 1 is
least probable and 4 is fairly certain)
2. Impact, from 1 to 4 (where 1 is low impact on your
project and 4 is high)
You multiply the two numbers
to give the danger. You will focus
on the high danger risks in step 3.
Step
3
is to think of possible risk response
actions for all of your most dangerous risks (for example, with danger = 9,
12 or 16). For each dangerous risk, generate as many response actions as
possible. (Don't worry now if some of these risk responses are overlapping or
mutually exclusive, you'll handle that in step 4).
Here is an example for a
conference:
Risk
|
Probability
|
Impact
|
Danger
|
Response Action
|
Low attendance
|
3
|
4
|
12
|
More advertising
Change the date
Lower the price
|
A presenter arrives late
|
2
|
2
|
4
|
|
We overrun the schedule
|
3
|
2
|
6
|
|
Presentations arrive too
late for printing
|
3
|
3
|
9
|
Set an earlier
date
Postpone the
conference
Print after the
conference
Find a faster
printer
|
Step
4
is to select a number of risk response actions. As you select them, remember
that you only have a limited amount of resources and time. You can't select
them all, you can't do everything,
That's the risk analysis
DONE, in 4 easy steps.
Now you need to update your
plan. All the risk response actions that you selected need to be added to your plan, and
then followed through to execution in the following days and weeks.
Let's look back on what you
have just done
1. You initially created an optimistic plan
2. The risk analysis allowed
your team to be pessimistic for 10
or 20 minutes
3. You updated your plan,
which should now be more realistic.
You've gone from optimism via pessimism to realism.
You've also created a simple risk register. Your 5-column table is
just that, a risk register, which you can keep alive using regular reviews and
risk analyses.
You've just started on the
road to better project management, as suggested by methods like Prince2
In just a few simple steps,
you have a lower risk project.
You have buckled your project
seat belt. It's easy to do. So do it now, to increase your project safety.
