Identifying and Managing Project Risk by the book

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Organizations that identify and plan project risk ensure resources are available for growth.

project, risk, toby elwin, Tom Kendrick, pmp, project riskRisk is anything that can positively or negatively affect the project. Positive risk frees up resources unexpectedly, negative risk ties up resources unexpectedly. Both present challenges.

The ability to scope, manage, and view a project, from concept to delivery, through a risk lens, presents the essence of organization competitive advantage.

The opposite of project effectiveness bogs down organization capital, both human and financial, through a cycle of change requests that drain human and financial resources and staff motivation who now need to focus how to get a wrong project right.

When you tie up capital resuscitating at-risk projects than capital is not available for investment.

I consider myself a recovering project manager. Yes, project management is a great profession and terrific competence, particularly the Project Management Institute (PMI) certification as a Project Management Professional (PMP), however, a gap (chasm) has revealed itself:

  • One one side: PMI’s feeling the world spins only by the grace of project management.
  • On the opposite side: an all-too-often rash of organizations that appoint project managers as administrative support to keep meetings on the calendar and meeting notes circulated.

That gap between perspectives is called risk.

As any profession demands maintaining continued education for on-going certification, so too does PMI. There expectation to remain certified presents a need for on-going Professional Development Units (PDUs). My area of chosen focus is risk. My annual lesson plan led me to an Advanced Risk Course and this book was presented in the coursework.

The sub title: Essential Tools for Failure-Proofing Your Project.

Good enough for me to add to my reading list.

Read More Books

See a more current set of books on my reading list heavy rotation page.

Projects deliver business value. A vote to invest in one project is a vote not to invest on another.

Comments

  1. says

    Hi,

    So, in all my years of experience, I find it interesting that I’ve never heard of the term “positive risk” until now. It’s an interesting term. How are they identified and are there ways to move toward positive risk and away from negative risk?

    My Best,

    Frank

    • says


      Twitter:
      Preparation to unveil all that may affect project scope, cost, or time uncover items that either delay or accelerate a project represent risk. Freeing up resources unexpectedly, just as tying up resources unexpectedly, affect projects

      Positive risk is opportunity.

      Positive risk can might include:

      • an experienced resource formerly unavailable becomes available – increased productivity;
      • acquisition of a technology – decrease risk;
      • could even include unexpectedly good weather – resource availability

      Some, however, look at positive risk as it directly results in negative risk:

      • greater product demand – resource constraint;
      • increased server/site traffic – resource constraint;
      • technology discovery – scope

      The goal of positive risk identification is to take advantage of opportunity. If a resource is tied up or freed up unexpectedly the organization project is delayed or accelerated. Opportunity lost is opportunity unrealized and organization risk for other project delivery is affected.

      You finish the project early – now what? You came in under budget – now what? Resources formerly assigned are now become available. Is this a testament to good project management? Would you consider scope and risk identification competence good if this happens just as if the converse were to happen?

      When a resource is freed up unexpectedly and not leveraged elsewhere that is opportunity lost.

      Any projects in your rear view mirror can you now view risk as positive as well as negative?
      Toby Elwin invite’s you to read Impact Analysis — project management SharePoint templateMy Profile

  2. says

    Hi Toby,

    Thanks for the follow-up. It makes sense when it’s framed in terms of opportunity.

    As for projects in the past that struck a chord, yes, there are a number of positive risks… The risk of finishing a project too early and having to decide what to do with the resources (as you can’t have them sitting around until the next project). The risk of finishing a project under budget and having the remaining funding taken away, before you can use it to improve other areas.

    Enjoy your Father’s Day!

    My Best,

    Frank

  3. says

    Great points Toby and Frank.

    Toby’s question about a risk being positive as well as negative, I remember this one experience. I manage software product development projects, and it is quite difficult to get bright engineers on the team as the market is competitive. In one of the projects we got a super bright engineer. But as it turned out there wasn’t ‘frequency match’ with other engineers on the team and pretty soon they started getting affected by his attitude. So the positive risk (opportunity) was quickly turning into a negative one (threat). A combination of ground rules and team-building activities slowly turned the situation around.

    I recently wrote a blog post on the mitigation strategies for positive as well as a negative risks on my project management blog, PMExamSmartNotes.com. Thought it might be relevant to the discussion here.

    Cheers,
    Shiv

    • says


      Twitter:
      Holding resources aside in case of risk, throwing resources to resolve unplanned risk both take resource reserves.

      Planning for something that may not happen and having something happen that was not planned take resources from other investments.

      Good risk, is just that: the risk to free up unexpected resources. How you marshal those resources for opportunity is how you manage risk.

      I appreciate your comment and link, Shiv. Project Management study offers a set of options, many out of the scope of what can be done, but all within scope of what could be done.

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