Summer is at its height right now in most places, although for some it’s cooling down a bit and for others, another school year is right around the corner. The economy has seemed to pick up in some areas, yet remained stagnant in others.

Either way, no matter what is up with you and/or your professional/business situation, this month’s topic of RISK is a timely one.

Ahhhhh, that little 4 letter work packs a wallop! Right? Or, you might be asking, “Why does RISK matter?” The importance of managing risk cannot be overstated. Project managers today are under tremendous pressure to meet deadlines that can’t be missed, prevent budget overruns and meet all requirements agreed to in a high quality way. The problem statement in this e-newsletter (sent from a reader) exemplifies this, along with possible solutions to minimize the risk.

And on another note, I have added “ontological coaching” to my offerings recently after completing a phenomenal yearlong program on it. I am really excited about this opportunity to offer life, professional and group coaching – and will tell you all about it in the next e-newsletter. If, in the meantime, you want to know more about it, please contact me at .

So to all, enjoy the waning summer month(s), open yourself to taking some risks, and ease gently into the fall!

All the best,

Susan

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Project Management World

The Problem...

I got an email from a reader working on a project where the company is getting ready to launch an entirely new computer system which will run their operation in a new way. The GO LIVE date is coming up rapidly and all hands are “on deck” working furiously to insure a smooth transition over to this system.

According to this reader, things are going well but he is concerned that no one is addressing the TRUE huge risk in front of them...which is that there is no the backup plan (or RISK ASSESSMENT PLAN) if this “smooth transition” hits some major unseen glitch at the last minute, especially when this shift affects their customers and vendors in a major way. The consequences if this happens are of a high impact and include cost overruns, missed or delayed deliverables and of course, the unknown impact on business operations, including customers and vendors. He asks, “How should this be addressed?”

Scroll down to see the solution from all three perspectives or jump to the Senior Management, Project Manager, or Team Member perspective.

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The Solution...

From the Senior Management Perspective...

"Often a pat on the back works better than a kick in the pants.
- John Marks Templeton, Worldwide Laws of Life

According to the Project Management Institute’s Project Management Body of Knowledge (PMBOK 2000), “Risk Management is a systematic process of identifying, analyzing, and responding to project risk.“

So, the question becomes, is there a process within your organization in which project teams can assess and report in to you on project risk?

If not, it would behoove you to develop one!

Another way to look at risk – a risk is a potential problem that:

• Has a probability of occurrence,
• Makes an impact if it does, and
• Influences the choices you can make.
  (NOTE: if there is no choice, it is not a risk, but a CONSTRAINT).

In the problem above, the stakeholders of this project need to hold a meeting to discuss “WHAT IFs?” For example, “WHAT IF the new vendor isn’t ready in time to GO LIVE on our launch date?” or “WHAT IF the vendor we are eliminating refuses to stay on a bit longer to see us through the transition?”

At some level it seems we are afraid that if we talk about the risks we will make them happen! NOT TRUE! It’s in the NOT talking about them that we will make it WORSE by avoiding them! Studies have shown that teams that talk about “crazy” risks actually perform better should the risk occur.

So create a process/procedure for your project teams to assess and report in on risk...and make it a SAFE place for them to tell you the truth!!

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From the Project Manager Perspective...

"There is no such thing as security. There never has been."
- Germaine Greer

Once a Project Management Plan is approved by stakeholders, what they REALLY want to know as you move along in executing the project, is - is it on time? On budget? Still meeting requirements in a high quality manner? Is there a significant variance between your plan and what is actually occurring?

This is a GREAT place to start assessing risk! They want to know your status of “actual” against “plan” and the risks associated with time, cost, quality (requirements, scope). Consider assessing risk from the 30-60-90 day look-ahead window – it’s a rolling 30, 60, 90 days of the risks you and your team see that might occur.

Also, if you have documented ASSUMPTIONS on your project plan, these ALL have risk associated with them. Why? Because assumptions are factors we consider true, real or certain when planning the project – they are NOT facts! Therefore, with every assumption there is an associated risk that the assumption was incorrect in the first place! These risks should definitely be communicated to stakeholders so they don't think these assumptions are FACTS when they aren't!

Here is a suggested format for assessing risk:

1. Identify the risk
2. What is the probability it will occur?
3. How will it impact this project if it does?

Then assess - if the probability and/or impact are low you might stop here. If not, then:

4. Create a Prevention Plan – how to prevent the risk from occurring
5. Identify a Contingency Plan – what to do if the risk occurs, in other words “Plan B”
6. Determine a Trigger Point – the event that has to occur for you to switch to the Contingency Plan. This is extremely important to discuss and come to agreement about.

It is your job as Project Manager to assess risk and report on it to your stakeholders. There should be few, if any, surprises if you do so. In some instances, stakeholders should be formulating the Contingency Plan – and if they don’t, ensure that YOU have documented and done all you can to prevent it from occurring.

And who knows! One of the stakeholders might even have the ability to reduce or eliminate a risk for you once they become aware of it!

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From the Team Member Perspective...

"Not everything that is faced can be changed. But NOTHING can be changed until it is faced."
- Unknown

As a team member, you should be assessing risk in the weekly reports you send to your Project Manager.

And what is one of your biggest risks? That your estimates for the tasks you signed up to perform are incorrect! And if this is true, the project schedule might be in jeopardy.

The worst thing you can do is NOTHING – the integrity of the project plan lies heavily on team members’ assessment of how things are going – from the estimates made to the technology used to the vendors we rely on.

Your job is to highlight the risks as they come up on the tasks you own, in addition to what you see happening on the project.

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Where is Susan?

Want to meet?

August 22-25: Houston, TX

September 12-15: Arlington, VA

September 19-22: San Francisco, CA

October 12-15: Denver, CO

October 16-23: NYC/North Jersey area

October 31-November 3: Houston, TX

November 9: Albuquerque, NM - Speaker at meeting of Women Entrepreneurs. Visit www.wenm.org to register.

November 2010: Window Rock, AZ - exact dates TBD

November/December 2010: San Antonio, TX - exact dates TBD