Join Chris Croft for an in-depth discussion in this video Planning for risk, part of Project Management Simplified.
- So the final part of planning your project, which is step eight of my 12 step process, is risk analysis. So what we do, we have a look at the project plan, probably drawn out as a Gantt chart, and we ask ourselves, "What could possibly go wrong?" Some people avoid that question. They think "Oh, we'll just sort "problems when they come up," but obviously it's a good idea to be a step ahead of this, to have thought of the risks and to already have plans in place. So, that's what we should do. So, we look at all the tasks, and we think "What could go wrong?" Good idea to involve your team in this process and also maybe to look at reviews of previous projects, so you can see what happened to those.
Now, once we've got a list of all the possible risks, we need to assess which ones to worry about. A good way to do this is to give them scores for how likely and how serious, both out of five. You've got a maximum score when you multiply those two numbers of 25. If the multiplied score goes into double figures, then it is a risk you should be concerned about. If it's not very likely or not very serious, you probably won't need to worry about it. But if it's fairly likely and fairly serious, it will go into double figures, and you need to have a plan.
Now, there are two types of plan you can have for reducing risks. You can either make it less likely to happen, or less serious if it does happen. Either one of those is fine, the objective is to get it down below the double figures. There are some things like, for example weather problems, that you can't really make less likely, but you can make it less serious. So, you can make sure that your wedding has a marquee or whatever it might be. There are other types of risk, for example falling over a cliff, that you can't really make less serious, but you can make it less likely by not going near the edge of the cliff.
Generally speaking, you can either make a risk less likely or less serious, or even both. What we want to see is that all the figures are below double by the end. What customers are interested in, is which of the risks have you not been able to handle? Which of the risks are they still exposed to? So, when you're sharing your risk plan to a customer, you can show them everything, but the bit they'll be interested in is "What am I still exposed to?" It's important for them to understand that there are risks involved in the project that you're doing for them. It's important for them to know that A, you've looked at the risks, and B, that you are on top of it, and you've managed to reduce most of them, but C, there are some that they are still exposed to.
Now, a final thing about risk planning is that it's a good idea to keep your risk plan up to date as you go through your project. Some of the risks that you identify at the start will reduce over time as you go past that danger point. Other risks, perhaps will appear halfway through the project, or will become more likely as events change during your project. Ideally, you'd have an up to date risk plan that you can discuss with stake holders and customers as you go along. So, I'd like you to ask yourself for your current project, have you got a risk plan? Is it up to date? If not, it would be a good idea to go back through that and reassess those risks.
Lynda.com is a PMI Registered Education Provider. This course qualifies for professional development units (PDUs). To view the activity and PDU details for this course, click here.
The PMI Registered Education Provider logo is a registered mark of the Project Management Institute, Inc.
- Defining project scope
- Deciding how to list tasks
- Estimating costs and time
- Planning for risk
- Staying on budget