How do I manage risk on a project that keeps changing?

September 2008 Quick Tip

Let’s start with the easier (and often more common) situation where there is little change during a project. This is the situation tacitly assumed in the project management literature, and it is the one covered by our book, Proactive Risk Management. In this case, you have a project plan that is relatively stable, and from it you can build, in a methodical way, a risk management plan. Proactive Risk Management shows you how to do this, as do other books on project risk management.

When your project is subject to constant change, you lack a stable project plan for building your risk management plan. However, managing risk becomes even more important in this volatile environment. This calls for a radical change in risk management strategy.

I call the more stable situation integrated risk management: risk management is integrated into the project planning, and each significant risk becomes just one more task in the project. When change is the norm, you must shift to intrinsic risk management, which means that everything you do to manage the project is done with the aim of managing its risk. You keep in touch with customers to manage customer-initiated changes, you use modular architectures to encapsulate design changes, and you conduct lots of experiments to understand the ramifications of changes. These topics happen to be chapters 2-4 of my book, Flexible Product Development, and, in fact, the whole book is about intrinsically managing risk in a changing environment.

For more on this, see a recent article, “Managing Project Risks When Change is the Norm.”

(c) Copyright 2013 Preston G. Smith. All Rights Reserved.