By Kevin Korterud
I’m amazed at how often I receive requests for help creating an effective risk management process. These inquiries usually come from organizations with a risk management process that hardly anyone uses. Stakeholders, program managers, department heads and executives are mystified about why nobody is declaring risks on their projects, which can create the false perception that everything is going fine.
Why does this happen? One reason is that project managers believe making risks visible to leadership could impair their efforts. Another reason is an organizational culture that creates a negative perception of risks. For example, I have seen some highly entrepreneurial companies foster a mindset of rugged heroism, which causes project managers to think they have to fix everything themselves. In this project environment, project managers worry that escalation to leadership will be seen as a sign of weakness.
In fact, there’s no use pretending any project is risk-free. Risk management is an essential part of any project: Whether you’re climbing a mountain or changing a light bulb, there are always risks. For anyone who’s ever been leery about flagging risks, or is just looking for some new approaches, here are five tips.
1. Think of risk management as a way to get what you need, when you need it.
Project managers rarely have the financial or command authority to change schedules or release additional funding—that’s leadership’s job. For this basic reason, declaring and escalating risks enables leaders to provide risk mitigation assistance.
Making risks visible to your leadership gives them enough lead time to provide relief when it is needed, not weeks or months later when unmitigated risks turn into project problems.
2. Don’t forget: People can be risks, too.
I have seen many risk management plans focus entirely on things: systems that might not be ready, processes affected by outside regulatory bodies, estimates that were done in a hurry at year-end budget cycles, etc.
What project managers often fail to consider in their risk planning is that people can also be risks.
For example, let’s say your project sponsor is replaced by someone who has no experience in the subject areas of your project. This lack of experience initially will cause longer decision-making cycles as the new sponsor comes up to speed in the subject areas.
So be sure to include people risks in your risk register—they can affect your progress as much as more inanimate factors.
3. Create guiding principles for risk management.
While there may be a process in place for managing risks once they appear, quite often it is unclear to project managers when and how to escalate risks to higher levels in an organization based on their potential impact.
To create clarity and promote transparency around risk management, the best approach is to set guiding principles that govern the process. The rules should be simple and broadly communicated throughout an organization.
Examples of guiding principles include:
Declaring project risks demonstrates professional discipline that will be recognized by leadership.
A potential mitigation approach should be prepared for every identified risk.
Risks with greater potential impact need to be made visible at higher levels in the organization.
4. Use the 30/20/10 rule of thumb.
In my experience, the most frequent question asked by project managers is how many risks should be identified on a project. For example, a person might feel that a small project should have a small number of risks. But that’s not necessarily true, especially if a small project impacts a large population of people.
One risk management approach I recommend to project managers is the 30/20/10 rule, which starts with a broad slate of risks and narrows them down throughout the life of the project.
Here’s how it works: Identify risks at the beginning of the project that, if realized, would affect 30 percent of the schedule, budget or results. Midway through the project, the goal is to lower the potential impact of risks to 20 percent of the schedule, budget or results. By the end of the project, the project should carry risks containing no more than a 10 percent impact.
5. Don’t forget the bigger picture.
Project managers frequently tell me they would have finished a project on schedule, but team members were pulled into another project. Translation: another project was more important. And the strategic relevance of your project matters just as much as how you manage that project on a day-to-day basis.
To manage the risk of irrelevance, conduct an assessment on a recurring basis of how your project fits into your organization’s strategy and portfolio. Validate the relative priority of the project against other active and pending projects, and check on potential scheduling dependencies that may impact your plans, as well as any resource conflicts that may be triggered by other projects.
What techniques do you use to identify and mitigate risks on a project? If you’ve worked at an organization where flagging risks attracted negative attention from higher-ups, how did you deal with this challenge?
Seattle's Troubled Tunnel: 3 Communications Tips for Regaining the Public's Trust
Human Aspects of PM,
PM & the Economy,
PM Think About It,
Categories: Best Practices, Change Management, Communication, Complexity, Ethics, Generational PM, Government, Human Aspects of PM, Leadership, Lessons Learned, PM & the Economy, PM Think About It, Program Management, Project Delivery, Project Failure, Project Planning, Social Responsibility, Stakeholder, Strategy, Teams
One of the biggest public works projects in the United States right now has some major problems. It’s a more than $3 billion effort in Seattle, Washington to replace the Alaskan Way Viaduct, an aging elevated highway on the city’s waterfront, with a 2-mile-long tunnel. If you’ve been keeping an eye on the project, you know that the tunnel-boring machine (dubbed “Bertha”) broke down more than a year ago, creating various challenges and overruns. Public outcry is mounting.
Now, if you’re like me and believe in the power of communication to ensure that projects run more smoothly, the tunnel project has highlighted the need for more openness, better stakeholder management and speaking to your audience in understandable ways, instead of falling into buzzwords or corporate speak.
If I were working on the project right now, here are three things I would look at to regain the public’s trust and help everyone in Seattle and the state of Washington understand exactly where the project is.
1. Be willing to convey incomplete information. The project’s big challenge is that the machine built specifically for drilling the tunnel encountered a setback when it struck a metal pipe during the excavation process. Unfortunately, it took project leaders over a week to convey the extent of Bertha’s problem, the course of action and any sort of timeline to get things back on track. Since Bertha stopped working in December 2013, information has trickled out to stakeholders.
The project’s leaders could have set a much different tone early on by stating what they know and what it means to the project—along with an acknowledgement that they really aren’t 100 percent sure what the solution is, and a clear statement that they will work to provide status updates to all stakeholders as often as possible.
Instead, it’s been “hard to get straight answers,” as the Seattle radio station KUOW put it.
2. Be honest. This really goes hand in hand with the first point about having the confidence to convey information that is accurate, even if it is incomplete. The public has begun to doubt that project leaders are being honest about the tunnel’s current status and future. This is partly because when the city’s department of transportation (DOT) or the state government has updated the community about the project, they have given information that seems farfetched and is tough to believe in light of Bertha’s lack of progress.
Case in point: A DOT official recently toldSeattle’s City Council that the project was “70-percent complete.” That claim was met with a great deal of skepticism by journalists and members of the community.
The lesson for project managers is: Don’t fudge information to avoid blowback. In the long run, you are putting your project at a strategic disadvantage because you may lose funding or you may come under heavier oversight…or worse. So just explain things in an honest and forthcoming manner.
3. Be consistent in the delivery of information. A lack of consistent communications has been one of the big failings for the Seattle project team. And when there’s an information void, it will usually be filled by something you aren’t going to like. In this instance, the lack of communications has led to a real breakdown of trust.
That’s why you need to make a plan for communicating consistently with stakeholders. It should include the best ways to communicate with specific stakeholder groups, and a plan for gathering accurate, up-to-date information from the project team. To ensure timely gathering, build the consistent delivery of information into day-to-day project activities. Set a schedule of when you want your team members to communicate information to you, and hold them accountable.
In turn, you need to inform key stakeholders of when and how you’ll communicate information to them, and then stick to that plan.
In most cases, communications comes down to recognizing the importance of clarity in effective project leadership. In Seattle, you can see what a lack of a clear process can do to the trust between stakeholders and the project team. I’m confident that most unsuccessful projects began to unravel when communications stopped being clear and consistent.
What do you think?
As we move toward the end of the year and prepare our personal and professional goals for 2015, I’ve been thinking about how someone can go from being just a manager to being a leader.
Years ago, a big project I was working on with American Express and one of its partners ran into trouble. A lot of factors probably led to that, but one still stands out to me: I was succeeding as a manager but failing as a leader. And that was the project’s ultimate downfall.
Over the years, I’ve been able to reflect and grow from that experience. Here are three ways you can use my experience to help you become more of a leader in 2015.
1. Focus on the vision. Managers are, by their nature, implementers. We get tasked with projects that we may not have had a great deal of input into. But just because we’re helping our sponsors reach their goals doesn’t mean we can’t apply our vision as well. To focus on vision in your management and leadership, start by formulating what this project means to you, the organization, the team and the end users. Then, most importantly, personalize those aspects that are likely to inspire your team.
2. Focus on important conversations.I once read that a project manager spends 90 percent of his or her time communicating. To become a better leader, focus on the most important of these conversations: ones with your sponsor and your team. They are the people who are going to be able to inform you about changes in circumstances, troubles in a project or resource challenges. While there are lots of important people to talk with, the most important are the ones who have the most direct impact on the project’s success or failure — so prioritize those.
3. Look at the long-term.This advice ties into having a vision for your project and having conversations with your important team members and sponsors. But thinking long-term also means you need to infuse your vision and conversations with a future orientation. This might mean that you talk with your sponsor about how a project fits into a long-term strategic plan for the organization. Or, it might mean that you spend time during conversations with your team members asking about their goals and values. This can allow you to shift your actions and assignments in a way that delivers on the promise of the current project. At the same time, you will have built a stronger understanding and real relationship with your sponsors and teams that will transcend your current project and have lasting benefits for projects and years to come.
What are some of the ways you’ve helped make yourself a stronger leader, rather than solely a manager?
My father spent decades working for a telephone company. When I was quite young, he took me to see a large centralized telephone switching facility. I was amazed and enthralled at seeing all the technology it took to carry a person’s voice over a telephone line between houses on a street or across oceans. Leaving the facility, he told me, “You know, all of what you saw here doesn’t matter unless we can get the last 100 feet of a person’s phone line right.” Although the end-user experience back then consisted of selecting numbers on a rotary dial, there were still many technological considerations in getting things to work in the last 100 feet from a telephone pole to a house.
Over the span of my project management career, I’ve realized the wisdom in getting those “last 100 feet” right for an end user — and how doing so is an essential part of the success of a project. Here are important components for getting those last details right:
1. Find end-user stakeholders. It is very common to have one or more stakeholders who are leaders in an organization. Stakeholders who are leaders provide essential strategic direction to a project. However, it is equally important to get the perspective of the people who will eventually use the outputs of a project. In addition to leadership stakeholders, create a group of end-user stakeholders that can provide a detailed perspective on these outputs. This balance of stakeholders between leadership and end users will give an all-encompassing view to help the project meet objectives.
2. Mind location. Quite often, a project manager is physically located near the project’s leadership stakeholders. However, certain types of projects that involve the creation of new processes and products would be better served if the project manager were located closer to the team serving end users, or the end users themselves. Doing so provides additional visibility to factors affecting the project that may come up in formal meetings. For example, the president of a global automobile company prefers to be located out on the design floor so he can have clearer communications with his designers, which results in higher-quality automobiles.
3. Develop functional success criteria. Much of our project management time and efforts focus on meeting functional requirements. But it’s also valuable to know how well we are meeting these requirements. To improve the quality of the outputs of a project, document functional success criteria for each requirement. For example, if a requirement states that a process is intended to produce a certain product, also specify performance criteria for the product. This can include functional success criteria such as: “Billing information must be displayed within two seconds for a customer inquiry 99 percent of the time.” Adding functional success criteria will promote end-user satisfaction and overall project quality.
4. Measure outcome-based metrics. We all know the value of measuring our project performance with A Guide to the Project Management Body of Knowledge (PMBOK® Guide)metrics such as schedule performance index (SPI) and other useful progress indicators. While these measurements are important, we also need metrics that measure the performance of the outcomes of the project. These can include adoption rates of a new process, evaluating end-user satisfaction with a survey and analysis of labor costs to complete a task. As these measurements typically occur near the close of the project, they can be conducted by someone other than the project manager.
It has been many years since my father took me into the telephone switching room. However, his comments about the importance of getting it right to the very end have stayed with me throughout my own decades-long career.
Do you have any tips on managing the “last 100 feet”?
As much as we wish these things didn’t occur, we sometimes find ourselves having to leave a project early or terminate a business engagement. This is always difficult to do, and how you do it can help you maintain your integrity and credibility throughout the transition.
Recently, I had to terminate a business relationship myself. Here are a few lessons that I learned that you can apply the next time you are in a similar situation.
1. Place the blame on yourself. I know you wouldn’t be leaving a project or quitting a business relationship if it were all your fault, but the key thing here is that you need to buck up and take responsibility for the business arrangement ending. There are several ways you can frame it to take the emphasis for the decision away from the other party. For example: “I’m sorry, but I just don’t have the ability to deliver the work to you in a manner that you have grown accustomed to” or “I find myself at a point where I don’t feel my presence best serves the project, and I think a new set of eyes is going to be helpful to getting things back on track.” Or, you can come up with your own. The point is that you take a little of the emphasis off the party that you are ending the relationship with and place it on yourself. This will lessen any bad blood or negativity from the decision. It is important to note that you must cast the decision in terms of your inability to continue to serve the client in a manner that he or she deserves.
2. If possible, present options for replacements.If you find yourself at a point of no return and need out of a business relationship, you can soften the blow even more if you provide alternatives. The question you are probably asking yourself is, “If I can’t work with this person or on this project, why would I refer them to someone else?” But the truth is, we are all in different businesses and at different stages of our career — and while your threshold for some clients may be zero, someone just starting out or looking to find a different focus may be more than willing to accept a challenge that you consider unnecessary. This goes back to the first point: If you can’t serve the client in the way that he or she deserves, you are doing the client a favor by removing yourself from the project and helping him or her find someone who can do better.
3. Be prepared for blowback.Even when these things go great, there will be some sort of blowback or negative impact. You might have spelled everything out with as much tact as a veteran diplomat, but you are still leaving the business relationship with a jilted partner who may lash out to other members of your organization or other potential business partners. In this instance, you can try to contain any negative feedback or impact on you and your career by preparing a standard statement that you give to everyone that explains your role in the dissolution of the relationship. It should cast a bad situation in the most favorable light for you. One I have used is: “I am sorry the project didn’t work out, but I made a series of unwise choices that made my effectiveness impossible, and to best serve the project, I felt it was best for me to step away.” That’s it — it isn’t perfect, but neither is the situation you find yourself in.
How have you found success in ending business relationships?
Join meon December 4, 2014, in my upcoming seminar on leadership in project management.