By Christian Bisson
Risk management is often overlooked. Most people think it’s simply additional costs; others think it’s secondary and can be put aside to prioritize everything else. Some simply don’t understand it at all.
Regardless, project managers should always push the team to do it, even if at first it seems like it’s more about educating than any actual risk management.
While doing just that recently, though, I stumbled onto a new point of view I didn’t see coming: Risk management is “negative.” The rationale behind this view seemed to be that it makes us focus on what could go wrong, when we should be managing the project without thinking about potential problems.
I can’t deny that being positive is important for every aspect of one’s life. But I couldn’t disagree more that thinking about what could go wrong is negative. If anything, risk management is a positive way to work to make sure the negative stays far away from your projects.
Risk management is also about focusing on the positive risks and how to embrace those opportunities, although that part of risk management is often overlooked, unfortunately.
Have you come across similar point of views around risk management?
Have you been in situations where it seems that only shouting generates results? Or has your team been pressured to complete tasks that don’t appear to benefit your project? Maybe as the project manager, you have been in the middle of confusion and agitation that seem to undermine your project management abilities.
Could it be that many of the scenarios you encounter have their roots in conflicting stakeholder requests and misunderstandings? Well, it’s possible to avoid these types of predicaments. Consider utilizing the following three tools that allow you to have better control of your project and your project team:
1) Communications Plan. Outline a plan with names, contact information, and details on when and what messages need to be delivered to and from you. This tool allows you to know the frequency of message exchanges and the media required for specific contacts.
It also lets you know what level of detail the message should have, i.e., if it is going to a senior manager vs. a member of the supporting team.
2) Stakeholder Analysis. Prepare an analysis of your stakeholders to understand what their roles are and what area of your project is impacted by their involvement. This tool can help you with the department that has the biggest impact all the way down to the departments that have even a small effect.
Additionally, this tool can show how those who are directly or indirectly connected to your project may have an influence that can be detrimental.
3) Project Plan. Develop a plan with the focus on your project objectives and what the project will entail. Organize the plan for what needs to be done and when. The tool should show ownership and timings that you can share with stakeholders to also make them aware of the potential influence of their requests.
Sometimes, we get can get distracted when trying so hard to make sure our projects meet every need. There are many voices, conflicts, risks and events that affect the success of our project. Leaning on these tools may make your stakeholder management process smoother.
By Conrado Morlan
When I was a portfolio manager, I attended many portfolio status meetings where projects were reviewed and assessed based on their status color. The status color—green, yellow or red—was usually determined by a combination of specific metrics defined by the organization's project management office.
Green meant the portfolio was on track, yellow meant the portfolio could be in danger of not meeting its goals, and red meant the portfolio was in serious danger.
Attendees’ behavior during these review meetings was always the same. To me, it revealed how simplistic or misleading the tri-color status system can be. Portfolios with a green status received no questions from the audience, even when a portfolio manager conducting the presentation specifically asked if anyone had questions.
On the other hand, yellow and red status portfolios produced expressions of surprise and/or contempt. The audience bombarded the portfolio manager with questions and asked for contingency plans to bring back those portfolios to green status.
At times I felt those portfolio managers were being punished for doing their job well. And I always wonder if people had dug deeper into the portfolios with green status, would they still have been so surprised or contemptuous of the other portfolios?
A portfolios status turns yellow or red because a risk turned into a problem or because of internal dependencies like other portfolios or external dependencies like new government regulations. When portfolios are aligned with the organization's strategy, portfolio managers must know all the risks identified in the strategy and assess how those risks will impact the project portfolio.
That’s their job. Furthermore, portfolio managers who create awareness among the portfolio steering committee about risks or external dependencies are being smart. They’re gathering input to decide which projects in the portfolio may need to be postponed, which may need to have their scope changed based on risk and/or internal or external dependencies, and which may need budget cuts or increases.
In other words, a yellow or red status can indicate a portfolio manager’s competence and sophistication, rather than incompetence and stupidity.
As a portfolio manager, how do you avoid surprise and contempt among your stakeholders?
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?
The yellow rubber duck that floats in baths of families the world over started appearing in harbors around the globe in 2007 — but not in their usual small size, but as giant floating structures. To the delight of many, waterways worldwide were being turned into a huge baths. Bath time reached Taiwan officially in 2013 at Kaohsiung City’s Glory Pier.
This traveling sculpture display Rubber Duck was an international art show by Dutch artist Florentijn Hofman. It has been built and displayed worldwide with the aid of two volumes of installation guides and specifications. The books offered details ranging from the materials of the sculpture's construction to the patterns those materials needed to be cut into and how they should be sewn together. They also included calculations of the sculpture's buoyancy and weight to help with moving and securing it.
In addition, these books recorded the best practice of each construction of the Rubber Duck. In each new city the sculpture appeared, lessons learned were recorded. This meant that each new appearance of the sculpture would feature an accumulation of experience and insight in how best to manufacture and exhibit it.
Regardless of where it appeared, the Rubber Duck technically should have looked the same. But in reality, some cities’ ducks just looked prettier; while others’ had crooked mouths, tilted bodies or looked lethargic overall. Even if you have extensive lessons learned in hand, as well as basic guides to materials and construction, success comes down to the local project managers’ precision and quality control.
In the case of Taiwan’s Rubber Duck, erecting and placing the sculpture would be a challenge due to its size: At 18 meters (59 feet) high and 1 metric ton (2,205 pounds), it was the biggest in Asia at the time. Even more challenging were the threats of typhoons and earthquakes. Ayu Cheng, the project manager of the Taiwanese team, said they had to work on several issues, including:
The Ching Fu Shipbuilding Co. Ltd. and Airglow Co. Ltd. worked together to overcome these challenges. All the production teams, the project manager and the Kaohsiung Municipal created two precedents:
Have you worked on a program where you had to use lessons learned, requirements management and risk management together?