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  • Writer's picturelise

Embracing Risk

Don't avoid risk. Search it out. The sooner you find it the stronger your plan.

Risk is usually something we avoid, or mitigate, or eliminate, etc. However, one of the most powerful tools to creating and executing on plans is to embrace risk, to search it out and seek to understand it. Maybe it is a version of keep your friends close and your enemies closer. Knowing the plan is critical to achieving the goal, but identifying the major risks and facing them early, is even more important.

The underlying cause of unanticipated risk are the project assumptions we take for granted. We assume vendors will deliver on time, designs will work, regulations will not change, and the sun will come up in the east tomorrow. Some of those assumptions are pretty likely true, and some of those assumptions may not have a big impact to the project if they turn out to be false. For most of them we can build contingency plans or mitigations to prevent major disruption to executing on the plan.

In order to avoid derailing the project we need to build the major risk contingencies and mitigations into the plan. In order to not burden the plan with unnecessary steps we need to identify which risks are important enough to add to the plan, which ones we need to continue to monitor and which ones we can likely ignore.

Sorting this out starts with understanding what are the key assumptions hidden in the project plan. These assumptions could be about people, facilities, resources, or external forces like competitors or regulators. At the beginning of a project sit down and list out all the assumptions hidden in the plan. No assumption is too minor or silly at this point in time.

Once you have the list of assumptions evaluate them by their likelihood to be false and their impact if they are false. Anything that has a low likelihood or low impact you don’t have to worry about or plan for. For example, while the sun not rising in the East tomorrow might have a huge impact on the project, the likelihood of the sun not rising is very low. So let’s not worry about that one.

On the other hand, if your vendor is late delivering parts there is a medium risk to the project (a schedule but not achievement risk). If this is a reliable vendor you know well, the likelihood of a schedule miss is low, don’t worry about it. If the vendor is highly unreliable, plan a contingency like building weekly check-ins into the schedule, or qualifying another vendor as a back-up. If the vendor is unknown, then the likelihood of them not delivering on time might be moderate, and something you want to monitor throughout the project. In any case, identifying the risk early, and building the appropriate management plan, improves your likelihood of success.

Throughout a project risks and assumptions grow and change. Make it a habit in project teams to regularly add to the list of assumptions and check in on the likelihood and impact scoring. Has a previously identified risk become more or less important? Is there a new risk that needs to be managed? Search out risk, embrace it, face it, it makes you better.

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