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Do it early, and do it often… A Project Manager’s Survival Guide to Risk Management

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You feel really good about the project. Management agrees with the scope, your cross-functional team helped build the project schedule which meets your required delivery date, your risk management document captures all your known risks and you have mitigation plans defined. You’re prepared for anything that could happen on your project, right?

In these matters the only certainty is that nothing is certain. Pliny the Elder (23 AD – 79 AD)

According to the Merriam-Webster dictionary, risk is the possibility that something bad or unpleasant will happen and uncertainty is something that is unknown. In the context of project management, the PMBOK defines risk as an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives.

Ultimately, risks are things that you are aware of. You can plan for them and make decisions about whether you are willing to accept the consequences if they occur and become an issue or whether you want to spend the resources to prevent or mitigate them.

Uncertainties are those items that you don’t know about or anticipate. Every project has them. They put the project into reactive mode and can greatly disrupt your ability to deliver a project as planned.

To help explain the difference between risk and uncertainty, consider driving on a curvy road in the rain. Your risks are related to the rain and the curvy road. These are the things you know. As a driver you may determine how fast to drive based on visibility and traction. An uncertainty could be a driver stopped around a curve. As a driver, you have to react to avoid hitting the other car.

More experienced project managers appear to have fewer uncertainties on their projects. In addition, we often find that someone on the team suspected an uncertainty long before it became a risk, but it was never captured and analyzed.

Going back to our example of driving in the rain … a more experienced driver is likely to anticipate hazards that are around the curve and prepare for them. They may also be familiar with the road and likely blind spots. In a car with multiple passengers, even if the driver is unfamiliar with this road, someone else may have experience that also allows them to predict what could happen. In these cases, the uncertainty has transitioned to a risk that can be evaluated. In all cases, the driver needs to constantly assess the current situation and adjust their driving.

The project manager is the driver of the car. They need to anticipate and adjust the project based on risks and uncertainties. We recommend the following tips to manage risk and uncertainty.

  • At project kick-off, with a cross-functional team, identify project risks. Integrate business, regulatory, financial, manufacturing, supplier, etc., as well as technical risk, into your evaluation.
  • Score and rank the risks.
  • Develop mitigation plans for those with the highest risk.
  • Review risks regularly (e.g., weekly). Close and/or remove those which are no longer relevant. Encourage team members to bring up new risks and uncertainties. Add new ones as appropriate and evaluate them, defining mitigation plans as needed.
  • As an organization, capture risks and uncertainties in a list which is available to all projects for consideration on the next project.

All projects have risk and uncertainty. As a project manager, evaluating risk is not a one-time activity done at the beginning of a project. You must regularly review known risks and encourage the team to surface other potential items. By having an early warning, you are more likely to navigate the risks and uncertainties in a project so that it can be delivered as planned.

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