Creating a New Habit of Looking for Opportunities

Conceptual sign of sucess in business and lifeOur brains seem to be wired to recognize negatives and threats almost without us thinking about it. Louis Collins wrote an excellent article recently about this and it got me thinking about how this behaviour can permeate projects and programmes to the extent that they become paralysed by the analysis of the potential risks involved in doing something. You only have to look at any large-scale public sector programme to see how this can occur. That’s not to say that the problem is confined to the public sector, it’s just that the reporting of such problems makes it clear for all to see.

These problems get exasperated when the final milestones are less than clear. Contrast this with a final deadline that is crystal clear and understood by all that it can’t be changed. One example is getting everything ready for the Olympic Games, the opening ceremony date is set some seven years in advance and cannot be changed for any reason. If that isn’t a compelling vision for a programme I have no idea what is. London got it right for 2012 and no doubt Rio will do in 2016, the focus is absolute.

Organisations can be accused of being risk averse and this may well be true but they have become like that usually because they have had such bad experiences in the past when trying to deliver projects and programmes they do all they can to get things right before embarking. Getting the planning absolutely right makes sense but an overly negative bias of those involved may mean that in their minds at least, the risks in getting started outweigh the benefits of successfully delivering. Does this sound crazy? Well, of course it is but it isn’t fantasy either, it can and does happen. I remember one organisation that required 70+ different approval signatures before a project was allowed to go through to main board – surely a case of too many cooks messing up the broth!

The reality is that for all projects and programmes there are risks even after all the risk identification activities have taken place up front. That’s why risks get reviewed regularly (or at least should be) in a realistic and honest manner. Far too often risk owners simply acknowledge the risk and say ‘all is OK’, until the risks materialize. Unfortunately this mindset reads across into the identification of opportunities. This is for one of two reasons in my experience. One, if project team members and stakeholders are actually prompted to identify potential opportunities that might benefit the project this is done at the back end of a risk meeting when everyone has been concentrating on the negatives and just want to get back to work (or home). Secondly, if opportunities are identified the processes that have to be gone through to change the planned project can be so difficult and time consuming it makes it not worth the effort to even try to change for the better. A sad state of affairs.

So, some tips for becoming more positive about project opportunities:

  • Start all risk meetings with a meaningful session of opportunity identification – also sets a more positive tone for the whole meeting.
  • Report a Top 5 Opportunities to Programme and Project Boards – they may not get taken up immediately but you will start to get senior managers aware of ways of delivering more effectively.
  • When a new risk is identified always ask for a corresponding opportunity that it might give rise to – providing the end goal is crystal clear this won’t divert the project and it just may provide an innovative alternative route to success.

We may well be hard-wired for negativity which means project teams can be great at identifying risks but this can be overcome with practice as a new habit of opportunity identification and adoption is developed. At the end of the day it’s the success of the project that matters most, and nothing else.



Managing Risk – Business as usual during the 2012 Games


Guest Post by Simon Buehring


Millions of visitors are about to descent on London for the UK’s biggest ever sporting occasion – the Olympics. If you are a Londoner you will understand the daily frustrations that commuters put up with when travelling to work. With millions of extra journeys expected during the Games, it’s anyone’s guess whether the already overloaded transport infrastructure will cope.

Businesses are being encouraged to assess the impact the games will have on staff, customers and suppliers, and to plan accordingly. This is where risk analysis comes in. Whilst risk analysis is a standard activity on any project, performing an analysis of the risks associated with the Games can help businesses mitigate the worst effects on their everyday business as usual.

But what is a risk? A risk is an uncertain event that may or not occur in the future, so businesses need to think ahead and ask the question “what if?” some uncertain event is to occur. If it does occur, what would its impact be? And, what can we be done about it? Let’s look at these steps to see how it could be applied to the Olympics.

1. Risk identification

Every risk (i.e. uncertain event) has an underlying cause i.e. the increased demand for transport due to the Olympics.

What uncertain event may occur? Actually there are probably several, but we’ll just focus on one – that employees may not be able to travel to work on time.

What will be the effect of this risk? Every business must consider this. If staff were late getting to work, this will clearly have a detrimental effect on the daily activities of your business. If your business is a cafe, for example, what would the effect be on revenues if the shop were unable to open on time?

We have now identified the cause or the risk, the event itself, and its effect.

2. Risk assessment

Step two is to assess the risk in terms of its likelihood (probability) to occur, its impact if it does occur, and when in the future is it likely to occur (i.e. proximity).

If your business is nearby an Olympic venue, then the probability is going to be high due to very large number of people using the stations in the area. The impact of the risk again depends upon the nature of the business. A cafe might consider the loss of sales due to delayed opening. The proximity of the event will be between 27th July and 12th August.

3. Planning responses

Step three would be to plan one or more than one response. These could be one or more of:

  • Avoidance – i.e. take steps to prevent the event occurring. This could be achieved by shutting down the business during the Games and to ask staff to take a holiday. However, this is probably not a good idea because no revenues will be obtained during this period.
  • Reduction – i.e. take steps to reduce either the probability or the impact. Asking staff to set off 30 minutes earlier than normal when travelling to work could reduce the likelihood of the event occurring.
  • Acceptance – i.e. keep your fingers crossed and hope for the best.
  • Transfer – i.e. reduce the financial impact, possibly by taking out insurance against the risk. Although in this particular example, insurance is probably not going to be available.
  • Fallback – i.e. have a fallback plan (plan B) in place. This would only get executed if the uncertain event does actually occur e.g. if a supplier is unable to deliver because the café is closed, then re-schedule the delivery for a later date.

4. Implementation of responses

Step four is to implement one or more of the chosen responses and to monitor their effectiveness. When choosing which responses to implement, each option must be weighed up for the advantages to be gained, versus the costs associated with implementing the response.

5. Communicate

Step 5 is to communicate (via reports) the status of each risk and the effectiveness of the responses on a regular interval. The reports need to be sent to people in your business responsible for making decisions. The responses should be changed if they are not having the desired effect.

By applying good risk management activities within your business, the risk themselves may not necessarily be removed, but they can certainly reduce the overall effects of the risks.

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Simon Buehring is a project manager, consultant and trainer. He is the MD for KnowledgeTrain which offers PRINCE2 online courses and project management training.  Simon has extensive experience within the IT industry in the UK and Asia and can be contacted via the KnowledgeTrain website.

Website: www.prince2-online.co.uk


Ignore The Small Risks At Your Peril

There is a great temptation at Project and Programme Boards and review meetings to discuss all the up to date schedule and technical related work and in the last five minutes or so to quickly ‘review the top 10 risks’ and then close.  Perhaps this is an overly cynical view of how boards and meetings work and most of them are truly guided by the top 10 risks themselves, or maybe not – wouldn’t it be good?

Nevertheless, it is all too often the case that risks get partitioned off into their own separate review meeting after there has been a Risk Identification Workshop to brainstorm the risks at project initiation. While not wrong the way risk management dovetails into the overall governance arrangements is key to successful project delivery.

Regular updating of risks is an obvious activity, the results of which get fed into management reports but almost by definition it’s the higher scoring (probability and impact) risks that necessarily get focused on by senior managers. Unfortunately it can be lower scoring risks that are thought about initially that come back to bite the project later, appearing as ‘surprises’ and giving rise to knee-jerk reactions and senior level interventions which may or may not be helpful.

There are extremes of course and the extremely low probability and very high impact Black Swan events cannot by their very nature be specifically mitigated against although businesses can ensure they are as prepared as possible.

So what should be done to ensure the low scoring risks, those ones that show up as green on the Probability-Impact Charts, don’t suddenly become surprises that need immediate action? It’s all about good risk management practice and not brushing over the risks that people believe are unlikely to happen because time has run out in the risk review meeting.

If the risks are still considered appropriate then judge whether the probability of them happening has gone up, down or stayed about the same. It may still be low but over a number of reviews a trend may emerge that needs to be looked into.

Likewise, look at the severity of the impact to see if it is changing. What might have given rise to a low impact occurrence in the past may, given the timings on the project have become a high impact.

So make sure trends are plotted for all identified risks and not just the ambers and reds.  This way it will be possible to put in place appropriate actions to prevent those ‘surprises’ taking everyone’s attention and diverting their efforts away from business as usual.

Picture courtesy of www.pictfigo.com



How to Manage Risk Smarter and Avoid Overkill

Managing risk within a project is a good idea, that’s agreed upon. Risk Management is essential and contributes significantly to the successful delivery of projects and programmes. Where it can and does go wrong is when there is an over-reliance on the risk factors of the project. When these factors start driving the way the project moves forward, problems arise.  Risk management is crucial, but it’s not the be all and end all of the project. However, that’s what often occurs in overly risk-averse organizational cultures.

To help understand how risk within projects can be better managed it is worth considering a number of aspects of the risk identification and mitigation processes involved.

Use appropriate monitoring and mitigation

For large, complex programs covering numerous disciplines, (like lengthy construction, software, and telecommunications projects) it is appropriate to have a risk set-up that matches that complexity.  The set-up needs to identify risks in the disparate areas of the program and allow judgments to be made across the program as a whole.  A Risk Manager (and team members) might gather the requisite management information, for example.  Difficulties arise, however, when the scale of the project is reduced but the risk processes of large complex programs are applied.  When this happens, the risk process starts to drive the program and stops providing a benefit.

Record risk only once in multiple related projects

Far too often the same risks are identified across multiple related projects or within a program of projects.  Even with sophisticated risk software, the potential for confusion is great with different scores being applied to probabilities and impacts.  Make sure you identify the one true risk and record and track it within the correct project.  If other projects or a higher level program need to be aware of it, that is fine. Make them aware of it, but make sure you don’t start double or triple scoring the same risk.

The more risks you identify the longer the project

It’s strange but true.  The more risks you identify and manage within a project the greater the chance the project might not come in on time.  The reason for this?  Well, think about it. It’s very easy to identify lots of risks for any project, but it’s how far you go that really matters.  Get right down ‘in the weeds’ and you will still have to identify risk owners and people to investigate mitigation strategies, etc.  All this takes valuable time and effort away from the main job of project delivery.  So, make sure you have the important risks identified and managed, and keep reviewing them to ensure your list is up to date.

Accept the risk as is

Once you have identified your set of appropriate risks for your project you need to decide what to do about each and every one of them.  Putting in place some form of mitigation may be necessary. This will add cost to the budget, but that’s just the way it is.  Having said this, there could be risks that you decide to accept because the probability of them occurring is so low and/or the cost of putting in place some mitigation is high.  You aren’t ignoring the risk. You are making a conscious decision to accept that it may happen.

Recognise that opportunities arise

Risks happen in any project, and some may have been predicted and planned for while others may not have been.  The project is the project with its set requirements. That’s what everyone accepts as the truth.  But what if a risk occurs which starts to make you think seriously about the validity of the project or the direction in which it’s going?  When reviewing the project risks and looking at those that have occurred, ask yourself the question “Does this project still need to go in this direction or should we consider altering it?”  Of course, the ultimate choice might mean cancelling the project altogether, which is never an easy decision.

So, are all risks bad?

Of course not.  If you make sure you are managing the risks that are appropriate to the project, and you make related programs and projects aware of those risks, then you’ve covered most of your bases.  Opportunities can be anywhere within a project space, but just remember to think about them as you go through the risks – it makes that risk review meeting far more meaningful.