This video gives you hints and tips for prioritizing your risks, so you can address them in an efficient manner, given the specific project you are managing and the concerns of your primary stakeholders.
- I hate spiders but I think snakes are pretty cool. My wife however, is terrified by both of them. Eliminating either of these critters in my yard is a high priority for her. However, I'd rather leave the snakes and get rid of the spiders. Our priority for risks is different. A similar situation will take place on your projects. It's important to remember that your stakeholders, sponsors, and project team may want you to treat risks differently.
Here are the steps you can take to make sure you and your risk sensitive stakeholders will be aligned when it comes to managing your project risks. First, split your risks into impact type. Time impacts, scope impacts, and cost impacts. Once you've done this, consider your stakeholders' tolerance for these three types of risk. Second, consider prioritizing your risks to ensure the impact type with the lowest stakeholder tolerance gets a high priority.
By understanding the sensitivities of your stakeholders and sponsor and adjusting the way you prioritize things, you'll have an easier time managing risk on your project. The third step in refining your risk analysis is to consider your potential risk treatment actions and their cost. Then compare the actual cost the risk would add to your project and most importantly the impact to the perception of your stakeholders. A project manager and sponsor rarely have a large fund to mitigate risks.
As a result, you need to decide how to allocate those funds wisely. If you only have $200,000 of risk treatment funding available to manage risk on your project, you want to have the risk prioritized and only allocate the $200,000 to the risks that should be addressed. This prioritization should consider the overall financial impact to the risk, the cost of addressing the risk, and the risk tolerance of your sponsor and senior stakeholders.
Once you've done this, you're ready to take the fourth and final step to completing your risk analysis. Share your prioritized risks with your sponsor. I have included a table in the exercise files to provide you with a format I recommend. Here are some tips to finalize your risk analysis. It's important that you communicate your estimates and assumptions so you and your stakeholders understand your thought process. And last, fault on the side of being inclusive, involve as many stakeholders as you can.
Not only will you produce a better risk analysis product but in the event an unexpected risk does become an issue, you won't be alone when answering the dreaded why didn't you think of that question? Taking these steps to assess and prioritize risks is well worth it. Understanding who will react to each type of risk can help you understand and proactively work with your stakeholders. Kind of like understanding that your boss might be terrified of that snake. So even though you think it's cool with beautiful markings, best keep it away from him.
Note: This course follows the latest guidance from Project Management Institute, Inc., as outlined the PMBOK® 6 Guide.
- Explore why dealing with risks needs to be part of the everyday process used to manage a project.
- Learn to outline the most common, pragmatic approaches to identifying risks specific to a project.
- Recall methods for qualifying and quantifying your risks to determine specific risks and manage their costs.
- Examine the primary considerations for a project risk plan and what components should be included in every plan.
- Assess techniques that help you identify the overall risk a project presents to your business.
- Examine several risk analysis and filtering examples that help ensure you've addressed individual risks properly on your project.