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The Soft and Squishy Side of Risk How To Get Started Identifying Your Risks

The Soft and Squishy Side of Risk How To Get Started Identifying Your Risks. April 23, 2012. Presented by: Joann Heck, PMI-RMP, PMP Project Support Process Manager SRA International, Inc. Joann_Heck@sra.com 703-227-8351. A risk cannot be managed

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The Soft and Squishy Side of Risk How To Get Started Identifying Your Risks

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  1. The Soft and Squishy Side of Risk How To Get Started Identifying Your Risks April 23, 2012 Presented by: Joann Heck, PMI-RMP, PMP Project Support Process Manager SRA International, Inc. Joann_Heck@sra.com 703-227-8351

  2. A risk cannot be managed unless it is first identified. PMI Risk Management Handbook

  3. What is a RISK? Definable future event that will affect one or more of your project objectives. ===================================================== A future event: • that is uncertain – that has a probability of occurrence is above 0% but less than 100% • with at least one cause – that is uniquely associated with it • that has consequences should it occur - positive or negative consequences (impact) • that has a time envelope associated with it. A short “fuse” or time frame prior to the event occurring is considered urgent for purposes of action

  4. Risk Characteristics Every risk has 3 characteristics … • PROBABILITY – likelihood of the risk happening; the occurrence • IMPACT – amount of consequence (impact) caused by the risk. • should the risk occur it could be positive or negative, depends upon the kind of risk. • URGENCY – the need to respond in the near-term or in the far-term

  5. Types of Risks Negative Risk = Threat Positive Risk = Opportunity 5

  6. Negative Risk Immediate and future threats … THREAT …

  7. Positive Risk Immediate and Future Opportunities …Opportunities…

  8. WE Don’t Know . . . What we don’t know! • This makes us dangerous to the success of our project • This causes us to “assume” things are true when they may not be true • This causes us to believe in the reality we have made up and are convinced is the ‘reality’ DANGER WILL ROBINSON ! ! ! ! !

  9. Why Identify Risks? We identify risks so we can manage risks by taking the time to plan, identify, analyze, determine responses, monitor, and control actions to: • INCREASE the probability and resultant impact to our project for Positive Events (opportunities) • DECREASE the probability and resultant impact to our project of Negative Events (threats) • To consider the impacts of ACCEPTING risks we choose not to do anything about So we can be more prepared as we move from planning into project execution/implementation.

  10. Cone of Uncertainty Project Risk Project Schedule As you near project end, there is less risk since the requirements are well known and the activities and events are almost all done! At the beginning of every project, there is lots of risk – because we don’t know much about the requirements and the future activities / events Project Initiation Qrtr Four Status & Closeout Qrtr One Status Qrtr Two Status Qrtr Three Status

  11. Management vs Fire Fighting

  12. Risk Identification

  13. Link Risks to Project Objectives Cost Quality Schedule Technical 13

  14. Tools for Risk Management Planning • Planning Meetings • Include risk as an agenda item in every meeting • Seek description, impact, and resolution • Interviews • Include team members, managers, subcontractors • Include customers, other vendors • Include internet searches • Discussions • Seek description, impact, and resolution

  15. Tools for Identifying Risks

  16. Tools for Identifying Risks • Information gathering techniques • Asking • Brainstorming • Company historical information • Discussions • Seek and you will find…

  17. Tools for Identifying Risks • Performing preliminary analyses using checklists • Project specific lists of points that you want to review for risks • Start with the SEI for examples of risk checklists http://www.sei.cmu.edu/library/abstracts/reports/93tr006.cfm

  18. Tools for Identifying Risks Free copies of many quality tools can be obtained at: http://asq.org/learn-about-quality/tools-templates.html

  19. Tools for Identifying Risks

  20. Where To Look for Risks • Organizational Process Assets (History) • Lessons Learned from Other Projects • Risk Sources • Risk Taxonomy • Project Assumptions • Work Breakdown Structure (WBS)

  21. Where To Look for Risks • Customer – we have no control over these • Multiple decision makers • Geographically disperse • Micromanager • Company Management – we have no control over these as well • Multiple decision makers • Geographically disperse • Micromanager

  22. Sources of Technical Risk • Scope not clearly defined (including boundaries, assumptions, and constraints) • Requirements not fully defined • No basis of estimate • Technical methodology not defined • Processes and procedures are not mature • New (leading edge) technology to be used • More than five interfaces to other external systems • Performance requirements not well understood • Safety issues are not identified • Security issues are not detailed and understood • Test and user acceptance plans are not agreed upon by customer

  23. Sources of Management Risk • Shared Project Manager and/or Technical Lead • Multiple Projects/Programs/Portfolios to manage • Matrix Organization – may be conflicting management • Staffing/Resource Challenges • Weak Communication/No Communication Plan • Inconsistent Information • Environmental issues • Safety Issues • Quality Issues • Company’s Reputation

  24. Sources of External Risk** • Legislation • Exchange rates • Site/facilities • Environmental/weather • Competition • Regulatory • Political • Country • Social/demographic • Pressure groups • Force majeure ** Hillson, David. Managing Risk in Projects, Burlington, Vermont: Gower Publishing Company, 2009 Link = http://www.risk-doctor.com/

  25. Risk Taxonomy Technical Management Contractual External Schedule Quality

  26. Risks by WBS Element Risks by WBS Element Risks by Sub- Element

  27. Risks by the “-ilities” 1. Usability 2. Maintainability ( or Flexibility / Testability) 3. Scalability 4. Availability (or Reliability) 5. Extensibility 6. Security 7. Portability 8. Compatibility 9. Interoperability 10. Reusability 11. Serviceability 12.Dependability

  28. Summary Many of the early activities aimed at identifying risk (positive or negative) have to do with people skills, brainstorming, and creative activities. This is what I generically call “that soft squishy stuff” since it cannot be prescribed by a rigid process or specific steps. Communicating and presenting the team with opportunities to discuss and identify risks is paramount to the success of the project. This also teaches the newer project team members that the PM is serious about delivering “on time” and “within budget” to “satisfy the customer’s requirements.” This is also a soft and squishy skill that the PM can use to strengthen bonds, reinforce credibility, and become a trusted partner in the events of the project. Lastly, by providing regular opportunities to discuss risks, the PM is encouraging team members to participate and contribute their ideas & experiences. By soliciting their contributions to a risk program the PM motivates and makes the team stronger as they perform the activities necessary for project success.

  29. Questions????? 29

  30. PARKING LOT 1. 2. 3. 4. 5. 30

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