Would you buy a new car if it didn’t have airbags? Probably not. Would you drive without attaching your seat belt?  Again, probably not. You don’t take risks with your cars. So why you take risks with your project?

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 1is 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 2is 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 3is 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 4is 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.
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Written by Jeff on April 4, 2014 in blog
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