Project Practitioners > Risk Management for the Faint of Heart

Risk Management for the Faint of Heart

By Sinikka Waugh

It happened again the other day...I was talking to a colleague about a project she was faced with, and we quickly got around to the topic of risk.  I asked her about the risks to her project, and how she was planning to manage them.  Her previously engaged facial expressions vanished completely, and the only look I could detect was the blank stare of someone torn between being totally disinterested and scared out of her mind.

Why does the word "Risk" scare people so very much?  If I start talking to you about managing risks, I’m not trying to scare you or bore you...really.  And when I talk about possible response strategies, I’m not trying to talk "project speak"...We face risk and make decisions around how to respond to it every single day.  Think about it...

We choose an alternative route so we don’t get delayed in construction traffic (Avoid).  We pay for life insurance, health insurance, disability insurance, and property & casualty insurance to protect ourselves, our families, and our financial assets (Transfer).  When planning a summer barbecue with our friends, we pick a rain date or a gathering place with a shelter, so we can still get together even if the weather is lousy (Mitigate).  And even though we know our plans could change, we buy the non-refundable airline ticket for the trip to a friend’s wedding in Boston months in advance anyway (Accept). 

Without even thinking about it, we develop our own lists of sources of risk for our lives.  Some of it is based on personal experience (weather, construction, accidents), some based on the experience of others (fires, floods, fatal accidents), some on irrational fears (let’s be honest, we all have them), some on pure gut reaction, and the list goes on.  We categorize and prioritize risks as they might affect what we do, when we do it, how we spend our money, and our overall quality of life.

We even (somewhat subconsciously) assess the things we consider risks and analyze them when making our plans.  The probability that there will be construction delays on the interstate is high, but it could be even higher during rush hour, and significantly lower after 10pm.  The impact to me will vary based on how important it is that I arrive at my destination within a certain time frame:  it’s critical that I arrive to work on time, but for the run to the mall, the timing may be less important.

We encounter risk triggers and risk symptoms in our day to day lives as well.  For that trip to Boston in the fall, maybe the first symptom is that the engaged couple is quarreling.  No need to worry about the airline tickets just yet (since doesn’t everyone quarrel at least a little bit before their wedding) but it’s a symptom that causes us to keep an eye on that risk, maybe rank its probability a little higher, and move it up a notch on the list of things to watch for.  For that summer barbeque, maybe the first drop of rain is the trigger that causes us to change to the rain date, or maybe it’s the overcast sky and the morning forecast of 90% chance of rain.

We even account for residual risks (with most insurance policies, there’s still a deductible that I’m responsible to pay in the event of an insurance claim), and secondary risks (I selected an alternative, construction-free route, but this route has more traffic lights, so I’d better leave 5 minutes early in case I hit the lights wrong).

Making it deliberate...
The key to managing risk successfully as a project manager is to take what you already do at a subconscious level, and do it consciously, deliberately, and carefully. Try these simple strategies:

  • Consider the overall risk level of the project - think of how visible, costly, or critical the project is to you and to your organization.  This will help you know when to ratchet up your risk management.
  • Identify and categorize the list of things that could impact your project.  Look for patterns and trends.
  • Assess those risks, and prioritize them according to how likely they are to occur, and how great their impact could be.
  • Figure out how you will respond to each of the high risks, and at least some of the medium risks.
  • Stay current on your risks - update your plan with new risks as they arise, close out the old ones, and when you see a risk becoming an issue, and take the action you said you would take.

Sinikka Waugh, Project Coach, Your Clear Next Step

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