<img height="1" width="1" style="display:none" src="https://www.facebook.com/tr?id=290086984736480&amp;ev=PageView&amp;noscript=1">
Search
word-map-thumb

The Alternative Board Blog

Project Plan Risk Analysis

Jan. 15, 2013 | Posted by The Alternative Board Worldwide
toolbox_bg

Project Management for Small Business X

If there's one thing that’s constant with all projects plans, it's that none of them have more than 10 risks. In fact, many project plans start with the plan used in the last project, and carry existing risks forward. The risk carryover is pretty universal, it often happens in multi-million dollar projects undertaken by huge companies.  In project management, risk analysis is usually an afterthought.

Why don't project teams spend more time on risks?

  • Project managers feel that if they dwell too much on what could go wrong, and expose real risks, their project will get cancelled.
  • Project managers believe risk analysis us unnecessary because they can overcome any obstacle.
  • Project managers have the attitude that risks are outside their control. Therefore, why dwell on them?

 

 English: Every project is implemented under three constraints, scope, costs and schedule. The diagram shows quality as the fourth constraint or as a result of the three aforementioned constraints Project Management (Photo credit: Wikipedia)

 

I attended a project management seminar a few years back on the topic of risk management. The speaker had us watch a short segment from the Deadliest Catch series. Deadliest Catch is the show where fishermen brave treacherous elements in very rough seas to harvest delicious King Crab. After the clip, the leader of this seminar then had the participants, all project managers, spend a few minutes identifying as many fishing risks as possible.  All the teams identified at least a dozen risks, and some teams identified quite a few more.

Want additional insight? Download Hiring a Business Coach for Your Small Business now 

DOWNLOAD

I recommend the Deadliest Catch approach for project risk analysis. The project manager should not just come up with the risks herself. Instead, the person leading the project should assemble the entire project team, explain to them all risks involved with the project.  This explanation should include both internal and external project factors that could go wrong.  A good project manager will also give their team an opportunity to think of additional risks.  Guidelines for the types of risks that should be considered are:

  • Project staffing: what if you lose a key team member?
  • Funding risks: are there risks to funding the project through the whole lifecycle?
  • Acceptance/adoption risks: what if the customer doesn't like the solution?
  • Technology risks: does the team know enough about the nuances of the technology to ensure no significant obstacles will compromise the project?
  • Market risks: if the project is dependent on market conditions, what changes in the market could impact the success?
  • Scope management: is the project scope fixed or is it possible the scope will grow beyond what the team can deliver within time and schedule?
  • Time to complete: has the project scope been thoroughly analyzed or is there a risk the project has been underestimated?

After you go over the risks that you have found, ask each team member to take fifteen minutes to develop their list of risks. You'll be surprised what they come up with. Write all of the risks on a white board. Eliminate risks involving force majeure and other things outside of your control. Next, classify the remaining risks into those that can be mitigated and those that can't. Lastly, classify risks by likelihood of occurrence: very likely, somewhat likely, unlikely.

This analysis is a great starting point for your risk plan. You will inevitably come up with some other risks; and conclude that some risks from the team should not be included, but if you use this risk plan, you’ll have a great starting point.

The next step in risk analysis is to develop your mitigation plan. To develop mitigations, concentrate mostly on those risks that are very likely to occur. Consider those that are somewhat likely next. If a risk is very likely, then you must have a plan to mitigate it.

For example, if you have a key employee on the project that you feel is not fully committed to your business, you should put a stay bonus in place that is paid when the project is completed. If you have an acceptance risks by the customer, you could add an early pilot to the project so that you do not go too far before validating and refining the product. If the scope or schedule of the project is not firm, add some extra time and budget to the project to compensate.

If you find that you have very likely risks with no mitigation plans, you should seriously consider whether you should even go forward with the project.  Don't be like the young Johnny Cash. Things don't just sort themselves out; analyzing and mitigating risks are part of being a good project manager.

 

Read our 19 Reasons You Need a Business Owner Advisory Board

DOWNLOAD

Written by The Alternative Board Worldwide

Related posts

Prepare Employees for the Future of Work
Sep. 3, 2019 | Posted by The Alternative Board Worldwide
No one can say with certainty what the future of work will look like. But many elements are already in place, and employers should think long and hard about how their workplace will evolve as the...
How to be an Effective Manager in a Small Business
Jul. 23, 2019 | Posted by Ronita Mohan
People are what make up a business and managing them is one of the key tasks of any business owner or managerial level employee. Being an effective manager at a small business requires you to...
What's the Difference Between Business Development and Sales?
Jul. 18, 2019 | Posted by The Alternative Board Worldwide
At first glance, there doesn’t appear to be much distinction between business development and sales. Aren’t both activities geared towards generating more profit for the organization? Isn’t a sales...
5 Customer Acquisition Strategies that Spur Growth
Jul. 9, 2019 | Posted by The Alternative Board Worldwide
Maintaining a strong base of existing clients is essential for every business, but acquiring new customers is equally important. Without an influx of new and prospective customers, a business may...
5 Tips to Effectively Scale Business Growth
Jun. 27, 2019 | Posted by The Alternative Board Worldwide
All businesses need to grow, but at what pace and how quickly should they scale that growth? These questions intrigue (and sometimes torment) business owners, because there’s no single “right” answer...
How to Generate Word-of-Mouth Sales Referrals
Jun. 25, 2019 | Posted by The Alternative Board Worldwide
Think about how you choose to make your purchase. There’s research you do online, or perhaps you’ve bought a product or service from a particular company before, and you’re comfortable doing so...
Create a Customer Satisfaction Survey that Gets Results
Jun. 20, 2019 | Posted by The Alternative Board Worldwide
Crafting a customer survey that gauges satisfaction with your business isn’t as easy as it looks. If the survey is comprised of misleading questions, or comes burdened with too many instructions,...
4 Tips on Creating a Customer Experience Strategy
Jun. 6, 2019 | Posted by The Alternative Board Worldwide
In your company, how much thought is given to the quality of interactions between your customers and your business? The experience your customers have when interacting with your brand can make all...
Are You Looking to Expand Your Business?
Jun. 4, 2019 | Posted by Phil Spensieri, TAB York Region
Over the years, I’ve coached many business owners as they’ve worked to expand their business. Whether it’s the physical expansion of your office space, expanding your workforce, or investing in new...
Turning Loyal Customers into Brand Ambassadors
May. 30, 2019 | Posted by The Alternative Board Worldwide
Gaining loyal customers is just the first step in an effective growth strategy. For many companies, the hunt is on for individuals who are so taken by their products or services that they are willing...