The Best of Project Risk Management by Jason Wesltland

The Best of Project Risk Management A selection of professional insights from the Blog archive

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” project management topics available free to download and share. Here is a collection of excerpts and insights from blog posts that discuss effective ways to identify and manage risk and deal with issues and crisis. Enjoy!

Jason Westland CEO ProjectManager.com

What to do for a Project When Your Company is Sinking .......................................................................... 3 A Five Step Approach to Issue Management .............................................................................................. 5 3 Critical Things for your Issues Log ............................................................................................................ 6 Project Management Systems to Mitigate the Risk of the Arsonist/Firefighter ...................................... 10 Risk Management and the Three Bears .................................................................................................... 13 What’s Positive Risk on Projects?.............................................................................................................. 16 Risk Management and Project Management Go Hand in Hand ............................................................... 19 Why Project Managers Need a Risk Log .................................................................................................... 22 Managing Project Issues ............................................................................................................................ 25 What is Project Risk Control ...................................................................................................................... 25 How to Plot Project Management Risk ..................................................................................................... 25 High Risk Projects: How to Manage them ................................................................................................. 25 How to Manage Stakeholders During Crisis .............................................................................................. 25 30 Day Free Software Trial ........................................................................................................................ 26 ProjectManager.com © 2013 All Rights Reserved

What to do for a Project When Your Company is Sinking Here’s some simple advice to follow that is only four words long…be in the room. That’s it. You need to be in the room. That’s what you do for a project during tough times to make 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 and smaller, the rock has disappeared and things begin to calm down and get back to normal. The same thing happens in a company whenever there is a disruptive event such as a layoff. However, there are forces at work that are trying to minimize the impact of the splash 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 possible during these times so you know what to do for a project you may be concerned about. It may 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 to your project. You need to be in the room.

How to Be In the Room to Know What to Do For a Project The following suggestions are something you can apply whenever your company has gone through such an event as described above. 1. Self-Manage: If you are going to wait around for somebody to tell you what to do next, you’re crazy. Don’t take it personally, but you and your projects are most likely not a priority right now. You’re an experienced Project Manager and you know what to do ProjectManager.com © 2013 All Rights Reserved

for a project. Now is the time to create your own path and not wait on someone else to do it for you. Find out what’s going and insert yourself into that mix. You certainly can’t barge into a Board meeting that is occurring, but you can drop in on a conversation you overhear in the hall or follow up on a rumor that you may have heard from two or three sources. 2. Be at the Right Place at the Right Time: Part of self-managing is that you know where you need to be and when to get your job done. If all the action is occurring on the floor below yours, find a reason to visit that floor often. If you have multiple offices, and all the action is occurring in another office, find a reason why you need to get to that office. Don’t assume that anybody in this environment is going to come to you and ask your opinion. You need to be around to give your opinion about what to do for a project you are managing. 3. Keep Your Head Down: We’re not talking about keeping your head down for fear of getting shot or being timid, but rather keeping your head down to stay focused on what needs to be done to move your projects forward. This allows you to make progress, gain traction, 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 fly in the face of good manners, but this is the time you do need to crash the party. If you know there is a group of people working on what you are interested in, don’t wait for them to ask you to join them. You may need to even take this to another level. There may be certain people that DO NOT WANT YOU AT THE PARTY depending upon your viewpoint and opinion of what is going on with the company. These are especially the parties you want to attend. Decisions may be made at these discussions and meetings that could adversely affect your project and you want to make sure you are in the room to speak your mind. One more word of advice when it comes to what to do for a project when your company is sinking has to be done prior to the tide going out. You need to attach yourself to revenue. Find those projects that bring cash into the company. Work on projects that help with the bottom line. Be associated with projects that have a high potential / low risk 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 of project. However, if you don’t take a moment to reflect on what the value of these projects are to the organization you may find yourself one of the first ones overboard. ProjectManager.com © 2013 All Rights Reserved

Continually ask yourself and assess your situation and ask “if a layoff happened tomorrow, would the projects I’m working on bring enough value to the company to keep me on board?” If not, start finding those projects that will. You obviously won’t be able to change your portfolio of projects overnight, but if you consciously make those decisions you will be in a much better situation when those tough decisions have to be made.

A Five Step Approach to Issue Management The following five steps will help you with issue management and restoring balance to the universe.

1. Hear Them Out Hear people out. Sincerely and attentively listen to their concerns. Don’t allow people to interrupt each other. Everyone deserves an equal amount of time to express their concerns and work through their business management issues. Serve as the moderator. Stop people talking when you’ve heard the same comments repeatedly, and draw others out that are not saying much.

2. Serve as a Translator Once you feel enough time has passed and people have had the opportunity to express their concerns, sum up what you heard and do so diplomatically. Remove inflammatory words such as “you never”, “you always”, “you can’t” and “you won’t”. Acknowledge everyone’s concerns, remove the emotion, and focus on the facts. It’s all part of the issues management process. Facts can sometimes be elusive. You may need to dig a little harder, ask some clarifying questions, and throw some inaccurate statements out the window. Once everyone realizes you are not biased toward any side but want to focus on the SOLUTION, they will be that much more apt to deal in reality and get out of the emotional realm.

3. Get Everyone on Common Ground Now that you have emotion-free facts to work with, your next step is to get everyone on common ground. A good place to start is that everyone wants the best for the company, ProjectManager.com © 2013 All Rights Reserved

does not want to negatively impact the customer and wants to keep some type of normalcy and not introduce chaos into their own departments. That’s a great place to start in order to start talking about a SOLUTION.

4. Develop a Solution with all Stakeholders With everyone’s defenses and emotions down to DEFCON 5 and the realization that all have more in common than they thought, you can now begin working on a solution together. It’s amazing what will surface once tempers have cooled and calm heads prevail. Start connecting the dots, thinking outside the box or whatever form of business cliché you would like to get the problem figured out.

5. Follow-Up Work with the managers throughout the week to make sure they have what they need to implement the plan. Track and monitor the issues in your issue tracking software. Give this your highest attention since it started out as such a potential big deal. This will certainly come up at next week’s PMO meeting as part of the issue management portion of the discussion and be handled just like any other issue. Use this as the benchmark for how 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 with your projects as project manager. You have to have a lot of trust in people and your teams to get their jobs done. No matter how hard you try, at times you may be blindsided. The trick is to stay calm, work through the process above and bring closure to whatever is negatively impacting the project. That’s what issue management is all about!

3 Critical Things for your Issues Log However much you plan your project, engage your stakeholders or mitigate your risks, things will never turn out exactly how you planned. Projects have too many uncertainties and are affected by too many external and internal forces to go exactly to plan. As Helmuth von Moltke the Elder said, ‘No plan survives contact with the enemy’. ProjectManager.com © 2013 All Rights Reserved

When something that you haven’t planned for does happen, that’s an issue. Project managers keep an issues log that is used to record all the problems, incidents and disasters 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 online project management software may also have the feature to record and manage risks and issues. Don’t reinvent the wheel – use whatever template or tool you have available. Whatever system you use, here are 3 critical things that should definitely be included on your issues log.

1. A Description of the Issue Of course! You need a full description of the issue. This should include what has happened and what caused it to happen (if you know). Describe the problem in a few sentences and make a note of any risk it relates to – issues are often caused by risks that suddenly materialize, although they don’t have to be. Your description should also cover the impact on the project. Does this cause a big problem for the team, or is it something that can be managed quite easily? Will it create a delay, or result in a milestone being missed? Will it cost a lot of money to put right? Understanding the impact on the project will help you decide who is the best person to manage 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 you mention it in conversation, so it is a good idea to have a short description of just a few words as well. This can become shorthand for the long issue description and helps everyone realize what you are talking about. Creating a common language can also create 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 a tracking number as well. The format ‘I-001’ works well, and you can use the same numbering system for risks (‘R-001’ etc) and changes (‘C-001’ etc). Then, when you are ProjectManager.com © 2013 All Rights Reserved

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 Issue Who is going to be responsible for managing this problem? This is the issue owner, and this should also be noted down on the issue log. Online project management software often has the option of assigning the management of an issue to a project team member, so you can automatically allocate it to the right person to pick up the problem and work on the resolution. Donâ&#x20AC;&#x2122;t be tempted to take on all the management of issues yourself. While you may well have the knowledge and skills to be able to carry out the tasks required to resolve the problem, your role as project manager is to oversee the whole project. You may decide to keep the management of very significant issues for yourself so that you have the confidence that they are being dealt with in a timely fashion and so that you can report regularly to your stakeholders. You could also decide to keep yourself as the owner for the most difficult ones, as this can shelter the project team members from some of the organizational politics or challenging discussions. But generally, look at delegating the management of issues to your team members. This can also be a great opportunity to build responsibility in team members and help them develop professionally. You can always support a more junior member of the team, or ask their mentor, a more experienced project team member or their line manager to help out as well.

3. An Action Plan The third critical feature of an issues log is the action plan: what you are going to do about the problem. It is fine to have identified the issue and who is going to take responsibility for dealing with it, but what are they actually going to do?

The action plan should cover the tasks required to resolve the problem. This could take a bit of brainstorming if the path for resolving the issue isn’t clear. You may have to have a separate meeting about how to tackle the issue, so you may not be able to log all the actions 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 and planning 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 on the action plan. Sometimes it is not appropriate for them to do all the tasks – and sometimes 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 is reasonable for the issue that you have logged, note down why you have decided to do nothing. For example, the issue could have an unexpected benefit, so resolving it would be counter-productive. Or it could be caused by a change in local policy or legislation, and as 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 most important 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 are going to do about it, and then you are well on the way to having a successful resolution plan for your project issues.

Project Management Systems to Mitigate the Risk of the Arsonist/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/firefighters that 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 last minute, deliberately ignore something that needs to get done, and even send people down the wrong path intentionally. Why? Because this gives them the opportunity to sweep in and save the day when things really get off track! It’s frustrating to watch and something you quickly lose patience with as you see it unfold time and again before your eyes. Which begs the question, 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 Project Let’s address the question of why somebody would do this before we dive into the project management systems that could be used to manage such a person. The following are a few of the reasons why people will intentionally set a fire in the workplace 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 put things off until the last minute and create havoc and chaos around them. People are waiting on deliverables that they are expected to complete and schedules are quickly running out of time. Clients are getting nervous that they have not seen any tangible progress 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 to this type of behavior. Why? Because they know that “crunch time” is soon to come. It may be the last month, week, day, or hours before the project is due and they then step in and “take care of everything”. ProjectManager.com © 2013 All Rights Reserved

This is where the all-nighters and weekend work come into play. You come in the next morning and the firefighter/arsonist will be sitting there with a tired look on their long face. “Yeah, I had to stay here all night to get this done, but, it did get done”, they remark stoically. Meanwhile you are pulling your hair out as a project manager because they have thoughtlessly inconvenienced the rest of the team and their project management systems and put the entire project at risk. They feel needed: Another reason why some people will become an arsonist/firefighter is that it makes them feel needed. When everything runs smoothly people may not feel quite as needed as when things are careening out of control. Project management systems may be in place that allows a project to move seamlessly from beginning to end without a lot of chaos. Everyone does their part and then moves on to the next task at hand. The arsonist/firefighter has a greater need for recognition than most and will create opportunities that feed this desire to feel needed. They thrive on chaos: Yes, there are people that actually enjoy chaos. It goes against every fiber that a project manager has in their being, but some people do enjoy it when things 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 occupied and firing on all cylinders. They have to have a lot of noise and commotion around them at all times to heighten their performance levels. These are the corporate adrenaline junkies that enjoy such extreme sports as “not telling the whole story”, “over promise and under-deliver” and “I never said that” to name just a few. They like the fires that they set to be as large and hot as possible.

Project Management Systems to Mitigate the Risk of the Arsonist/Firefighter? There are a number of project management systems you can put in place as a project manager that will allow you to deal with the challenge of people that put the project at risk. Preemptive Project Management: Preemptive project management systems are anything you put in place that will prevent this behavior from occurring. You only need to be burned once by the arsonist behavior to realize that it’s not a good experience for you, the team and the client. If you know you are dealing with this type of person then make sure you anticipate what they are up to and head them off at the pass. For ProjectManager.com © 2013 All Rights Reserved

example, they may be procrastinating on getting a certain deliverable complete. You can move the deadline up in order to move it through the process faster and let them know that it has to be done at this particular time. They can then go through their motions of starting a fire, but you still have your deliverable (and team) intact without too much surrounding 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 drill into the details and verify for yourself the state of each deliverable. You have been burned too many times before by this person to allow something to go unverified until the last minute when you find out thereâ&#x20AC;&#x2122;s a roaring fire blazing. Rely on Objective Reports: A third project management system you can put in place to prevent the arsonist/firefighter from striking are objective reports. These reports should be designed to identify key deliverables and who is responsible for making these deliverables happen. Reviewing these reports in an objective manner each week at your status meetings will uncover whether this person is really on track or if they are steadily falling behind with the caveat that they have things under control. This objective way of managing someone that falls into the category of arsonist/firefighter is a great way to make sure they are on track as well as provide them with an understanding of how many other people are depending upon them to meet their date.

Risk Management and the Three Bears Everyone is familiar with the story about Goldilocks and the Three Bears. Goldilocks is out for a stroll and happens upon a house. She knocks on the door, and since no-one answer she walks right in, in pursuit of perfection. The porridge, chair, and bed had to be “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 risk identification, 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 if you 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 to work on the project may not be available if another project comes in before the one you are working on. It’s not certain that this could happen, but there is a definite possibility that this could occur. It is your job as a project manager to identify and articulate the impact this risk may have to your project. Risk management software can help assess the probability of risks occurring and identify which risks will convert to project issues. What impact will this risk have on the project? Will it bring the project to a grinding halt? Or, will the project be 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 needs to know this information. This is where the “art” of Risk Management comes into play. ProjectManager.com © 2013 All Rights Reserved

The Problem with Escalating Too Early This is where the porridge is too cold. There may be a risk you have identified on the project that a certain deliverable may not be delivered on time by one of the teams on the project. The probability of this event happening is about 50% and would have a medium impact to the project. So, there’s a 50/50 chance that this deliverable may be late and have a pretty serious negative impact to the project. The team responsible for delivering this part of the project has assured you that they are doing everything they can to make up any lost ground and keep the schedule on track. You now have a tough decision making process to go through. You reflect on this particular team’s track record in the past and feel relatively comfortable with their assurance that they can keep things on track. However, you also know there have been times with they have completely missed the mark despite their assurances. 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 Status update with the executive sponsor in attendance. The representative from that particular department now takes offense at the fact that you didn’t have enough faith in them to get things back on track and felt the need to get others involved. This makes their life harder with more scrutiny and additional checkpoints, requirements, and interference 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 a good answer to this question you may find that your working relationship with this team begins to quickly degrade. They will not be as forthcoming with information, nor as inclusive 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 work through. The solution? Make sure you have your facts straight. You need to deeply understand the risk and the associated impact it could have on the project. You need to clearly 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

You also need to communicate with them on a regular basis as to your motivation for escalating on a potential risk. The last thing you want to do is throw someone under the bus, 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 to who knew about what and when did they know about it. This is an extremely tough spot to be in. If you escalate too early, there is really not a good way to prove whether a problem would have occurred if you had not said anything as you can’t prove a negative. That’s why this area would be considered the “art” of project management. The right answer is based upon years of experience, previous mistakes, and a high level of trust that you have established with those that work on your project.

The Problem with Escalating Too Late This is where the porridge is too hot. A risk has now been realized and there has been no indication that it has ever been brought up before. Now begins the onslaught of questions from managers and executives scrambling to figure out what went wrong. The unfortunate part of this inquisition is that you are right in the middle of it. “Didn’t you realize this was going to happen? Why is this the first time I’m hearing about this? You do realize we could have resolved this issue if we had known about it earlier? Now it’s too late and there is nothing that can be done…” are all a typical line of questioning and conversations that will ensue once everyone realizes a risk has turned into a full-blown issue. Unfortunately, this is where even those who may have felt “betrayed” because you escalated on them too early in the first scenario may begin to recall things differently than you do. “Don’t you remember I told you about this being a potential risk about two months ago?” may be something that comes out at a project status meeting much to your chagrin. ProjectManager.com © 2013 All Rights Reserved

What to do? You have to intimately and deeply understand the downside of not reporting a risk that may happen. You may feel as if you are helping a colleague or teammate by not saying something, but ultimately that approach can blow up in both of your faces. The fire drill that results in bringing things back on track after it blows up is time consuming, exhausting, and many times unnecessary for everybody involved.

What’s Positive Risk on Projects? Risks – they are big, scary things that can disrupt our projects and cause no end of headaches. Plus we have to come up with mitigating strategies which means doing work for stuff that might not happen anyway! No one likes doing extra work. It makes being a project manager feel really negative at times, as we work away at trying to stop the bad things happening. “Taking a risk” is a seen as a bad thing that could lead to a poor outcome. You don’t take risks like going skiing without the right equipment or eating puffer fish that has not been properly prepared. We don’t want to take too many risks with a project in case it all goes 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 our professional 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 to think of risks as negative. The risk of going skiing without the right kit is that you will fall over and break your leg, ruining your holiday and having to rely on your friends and family to make you cups of tea while they would rather be out on the slopes themselves. ProjectManager.com © 2013 All Rights Reserved

But what if we could turn that around? What if taking that risk meant discovering a whole new way of skiing that started a fabulous new trend and saved people lots of money on their ski holidays? Risks can have positive outcomes, both in our personal lives and on our projects. At work you will sometimes hear this type of risk called an opportunity.

Types of Positive Risk Positive risks can take a number of forms but they can be hard to uncover because our brains are so conditioned to think of risks as bad. The easiest way to identify positive risk is to do it the same way as you would the negative risk. Work with your team to come up with a list of opportunities that could impact the project. Brainstorm all the good 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 Risk There 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 negative risk. Exploit the risk. Exploiting a risk means that you do everything you can to increase the chance 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, writing press releases and getting your in-house communications team involved. Share the risk. Sometimes you can’t get the full benefit of an opportunity working alone. For example, if you want to make sure that the warehouse is ready to cope with ProjectManager.com © 2013 All Rights Reserved

all those orders, work with that team on the order process. You could put in place a justin-time shipping process so that you don’t have too much stock lying around, but that it is available at short notice when customers need it. Your project benefits by customers being able to get their hands on the product quickly and the warehouse team benefits from 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. You simply say that you know it is a possibility and that you don’t intend to do anything to bring it about. If it happens, it happens, and you’ll deal with it then.

Managing Positive Risk Manage positive risk in the same way that you would manage negative risk. You can use your online project management software to record risks and the action plans that go with them. Remember to allocate an owner to the risk, add a date that the risk was first noted (your software may do this for you) and any follow up actions that happen. Build up your risk log with all this information – you don’t need a separate risk log for positive risk. 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 likely to happen now? Less likely? How effective have your action plans been? What can you do now to make any improvements? Keep your software risk log up-to-date with the latest status and actions, as this will also be useful when you come to review the success of the project in a post-project review.

Risk Management and Project Management Go Hand in Hand There are an innumerable amount of things that go can wrong on any project at any moment in time. It’s up to you as a project manager to be aware of these potential risks and do all that is within your power to mitigate those things that could possibly cause your 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 is great. New technology can reduce the amount of time it takes to do something, reduce the number of people that may need to work on a project, or automate previously manual tasks. New technology is even better once all the bugs are ironed out. If your company 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 to the fore if the type of project you are working on is new to you or your organization. It’s not 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 and may push the envelope a bit. There is greater room for mistakes to be made or setbacks to surface. Lapsed Time – If your risk management and project management plan was put together a considerable amount of time before the project kicked off, then you will also be exposing yourself to higher risk. There are many things that can come up between an original kickoff meeting and actually starting to work on a project. For example, ProjectManager.com © 2013 All Rights Reserved

something that seems to happen regularly these days is that one company is bought out by another company. If the project kickoff meeting was done prior to this buy-out and then six months pass before the project actually begins, your project will be at a greater amount of risk. Long Projects – Longer projects (6+ months to years) are always going to be exposed to more risk by the fact that they are around that much longer. Quick, short projects that take weeks or a few months to complete can keep their momentum and trajectory pretty consistent. Long, complicated, and unwieldy projects that span large amounts of time open for the door for increased focus on risk management and project management. Simply put, there is more time and opportunity for something to go wrong. If you have the dubious distinction of working on a long project that is running 6 months behind with a team that has never implemented a brand new technology…then hold your breath. You might be getting ready to jump off the Eiffel Tower!

5 Steps to Keep Risk Management and Project Management Together Risk Management and project management are joined at the hip. Risk management is arguably one of the more important disciplines of the project management profession. Why? Because, the goal of a project manager is to get a project done on time, in scope, and on budget, a risk management plan is required. The nemesis of every project manager is Risk. Risk exists to introduce elements into a project that can turn into Issues that will ensure a project is not done in time, is out of scope, and over budget. How can you prevent this from happening? Follow the five steps below to ensure your project completes successfully. 1. Risk Identification – Gather the team together to identify as many risks or things that could go wrong on your project as possible. Just have everyone call them out no matter how small, insignificant, or far-fetched a potential risk may seem. You’ll worry about categorizing them later. It is best to keep this running-list through a projector on the wall or on a whiteboard so everyone can see the list building. How do you know when ProjectManager.com © 2013 All Rights Reserved

you are done? When the momentum of risks that are called out begins to slow down and 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 be content with just the obvious ones on the surface. Make sure everyone has thought long and hard about what could go wrong and brought those up. 2. Risk Categorization – Now that you have your list of risks properly identified, you need to begin to prioritize them as to how they will impact your project. The best way to do this is to look at two areas. First, what is the likelihood that this particular risk will occur? 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 the results would be devastating, give it a ‘1’. If the results would have minimal to no impact, give it a ‘3’. 3. Risk Mitigation – At this point you will have a prioritized list of risks that are likely to occur and those that could have the greatest negative impact on a project. Now you can start putting a mitigation plan in place to do everything possible to avert those risks, or to come up with a plan to deal with the risk if it does come to fruition. Start with those items that have a high probability of occurring and have the highest potential negative effect on the project. 4. Risk Monitoring – When you are dealing with risk management process and project management you do not have the luxury of “set it and forget it.” It’s not possible to put the initial list of risks together, prioritize them, and then walk away without thinking about them again. You must constantly monitor those aspects of the project that could possibly cause delays or make you miss your targets. A portion of your weekly status meeting should be devoted to discussing risks and risk mitigation strategies. 5. Risk Communication – Finally, keep anyone and everyone that could be affected by the risks on your project up to speed on where things stand. Let them know if circumstances changed that make the risk more likely to occur. Or, perhaps something is no 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 into a full-blown issue. You need to let everyone involved know what is being done to make sure the project gets back on track.

Why Project Managers Need a Risk Log Risk 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 every day in your non-work life. What’s the risk of rain, shall I take an umbrella? What if we get stuck in a traffic jam? Let’s take an alternative route and pack some snacks and a drink for the car. What if the children are bored while we are out? Put a couple of extra toys in your bag. We manage risks like this all the time, working out the most appropriate 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 have a good risk log? Especially as they are so easy to put together, once you have an initial meeting to discuss risk with your project team. Here are 5 reasons why you need a risk log 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 would be a mitigating action. On your project, you will have to plan the mitigating actions. Some may be quite quick and easy to do. Others may require a lot of planning and doing and that will take team members away from the other project tasks. You will have to take this into account when you plan the activities for your team – don’t expect them to be able to manage their ‘normal’ project tasks from the schedule and take on risk mitigation activities as well. ProjectManager.com © 2013 All Rights Reserved

Use your risk log to identify the mitigating actions required and schedule them into your online project management tool so you that have a complete picture of the work required for the team.

2. A Risk Log Helps You Prioritize One 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 the greatest pain on the project? Rank your risks in priority order so you know which ones to focus on first. You can also prioritize by date, making sure that you spend time on the risks that were identified early in the project. The longer they are a project risk, the more chance there is that they will interrupt the project somehow! Remember that risks come and go, so when a risk has passed, take it off the log, or at least mark it as closed. This allows you to focus on the risks that are still a threat – don’t waste time prioritizing actions to address things that have already been and gone.

3. A Risk Log Helps You Budget Your mitigating actions are likely to incur costs, even if it is just the cost of the project team working on them. Look through your risk log and work out how much it will cost to manage 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 that you want, which is where your prioritization activity comes in. Distribute your available funds 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 but do 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 risk could have a positive implication for your project or business case.

4. A Risk Log Helps You Allocate Responsibility Another feature of a risk log is the risk owner. This should be a separate column or field in the log, and it should always have a name in! Someone has to take responsibility for managing the risk, even if they don’t end up doing all the work themselves. ProjectManager.com © 2013 All Rights Reserved

Make sure all your risks have an owner allocated. Documenting risk ownership in this way can really help people see what they are responsible for. It makes it easier for you to track progress as well, as you will always know who to ask for a status update. Try to avoid having yourself as the risk owner for all the risks – while it is sometimes appropriate 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 a degree of responsibility, so use the chance to delegate if you can.

5. A Risk Log Helps You Manage the Project Finally, your risk log will help you manage the project. Risk is inherent in all the projects we do, but you have a much better chance of success if you identify the potential problems upfront and then work with your team to address them. Remember that you can’t do risk management alone. It starts with risk identification, and there is no way that you have enough knowledge about all the specialist areas of the project to be able to accurately identify the possible pitfalls. Having a discussion with your team is the best way to identify risk. You can also include a section on risk management in each of your team meetings, so managing the project and the risks becomes inseparable. You’ll have far more chance of getting your project completed efficiently and effectively if you work together to handle risk management. These are five reasons why you need a risk log on your project, although you can probably think of more. If you are convinced, why not start your risk log today? Get your log template sorted out and then call the team together for a brainstorming session to see what risks you can identify!

Managing Project Issues Learn how to manage project issues with these seven steps to success. These seven steps are part of a best practice issue management process and are the core essence of project management. http://www.projectmanager.com/managing-project-issues.php

What is Project Risk Control Project risk control is critical to project planning. Watch this video to learn more about the requirements of project risk control from a project management expert. http://www.projectmanager.com/what-is-project-risk-control.php

How to Plot Project Management Risk Watch this video to learn how to implement risk management tips for your projects and improve your rate of success. http://www.projectmanager.com/how-to-plot-project-management-risk.php

High Risk Projects: How to Manage them High risk projects are fast-paced and exciting to work on. Watch the following video and get all the tips on how to manage a high risk projectâ&#x20AC;Ś http://www.projectmanager.com/high-risk-projects-how-to-manage-them.php

How to Manage Stakeholders During Crisis If you get into a project crisis, then use these tips presented by Devin Deen, Content Director at Projectmanager.com to help manage your stakeholders http://www.projectmanager.com/how-to-manage-stakeholders-during-crisis.php

30 Day Free Software Trial There 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 on projects efficiently. The second key difference is that our competitors charge a high upfront price as well as annual maintenance fees for new releases. Here at ProjectManager.com we offer you all of the features you need to manage projects, at a small monthly price of just $25 per user. That simple! When you sign up to ProjectManager.com, you also get for free: Unlimited Projects 3 Gigs of Document Storage Client Login Free Upgrade to New Releases

Take Action, Sign-Up for a 30 Day Free Trial Today!

Take a Free Trial Create your own Projects Sign up to boost your project success Any questions? Email support@ProjectManager.com and one of our friendly support staff will be happy to help. We also recommend a visit our resource library if you would like access to further: project management tips  video tutorials  project management templates