Five Ways to Remove Project Risk

The highest standard of risk management strategy is to remove the risk altogether. It is not always possible, but let’s survey five approaches that you can consider on aspects of your project.

1. Over-design

A “gold-plated” specification that is over-specified with respect to the core functionality. Examples include redundant components, over-size strength components, or higher specification materials. This is a solution beloved of civil engineers who build structures on which many lives depend. The up-front cost can be high, but often whole-life costs are reduced due to longer maintenance cycles and longer life expectancies. Not therefore a solution used in consumer electronics!

2. Buy certainty

When you select components that are well tested, you can lock certainty of functionality, quality or cost into a component of your plan. These are sometimes known as “COTS” solutions, standing for “Commercial Off-The-Shelf”. Rather than develop bespoke components that do “exactly what we want”; trade some functionality for certainty that what you have will work.

3. Alternative solution

There may be other solutions to an element of your plan that offer complete certainty of schedule, budget or functionality. For example, rather than risk stakeholder resistance to an unusual idea, invest in a more acceptable solution even if you feel it does not offer equal benefit.

4. Address root cause

Root cause analysis, using techniques like the Fishbone and Five Whys, can help you identify a strategy that will address the cause and remove the threat entirely. This can be an exhausting and costly process, but identifying all of the failure modes up-front and addressing each one will remove a big chunk of risk.

5. Remove the risky element from your plan

if you cannot control the risk and the threat level is unacceptable, the only thing to do is remove that element from your plan and accept the compromise this causes. This is the basis of many public health campaigns: to avoid the risk, avoid the risky behaviour. Most readers will apply this in many aspects of their lives.

---

Learn about the five other strategies for managing project risk in Dr Mike Clayton’s new book, “Risk Happens! Managing Risk and Avoiding Failure in Business Projects”

See www.riskhappens.co.uk for details.

Buy it in paperback from Amazon here,
or in Kindle format, here.

A Fishy Approach to Risk

One of the joys of my working life is doing something innovative.  So to be asked to develop a three module course on Problem Solving and Decision Making was great, and our client, SAP, is a great company.

But it’s better. This work gave me a chance to learn how to develop training for a virtual classroom.  Up to 16 participants around the world, learning with one facilitator, using great technology.

This is all beside the point

The point is this: running today’s module, on analytical methods, we covered a great problem solving tool which I also use for risk management.  I suspect many change leaders, and project and risk managers will have heard of it – but never thought to use it in their risk management process.

I am talking about Fishbone Diagrams

Photo by Johnath

http://www.flickr.com/photos/johnath/ / CC BY-SA 2.0

.

.

.

Fishbone diagrams are used to find root causes and are formally known as the Ishikawa Method.  This tool is ideal for getting to causes.

We draw a fishbone diagram, putting the problem at the head of the fish.  We then identify all of the possible causes and place each onto a “rib”. In the example below, here are eight typical sources of a problem.

We might then break each one down further, identifying different reasons why the hardware, data, processes or skills might cause the problem.  With “skills”, for example, the cause could be lack of training, inappropriate training, poor workplace support for developing skills, or poor motivation to use the skills.

How does this apply to Risk Management?

When we are identifying our risks, we often end up with a load of risks that are hard to manage, because they are poorly specified.  They are big and nebulous, because they are really not one risk at all: they are a basket of other, more specific risks.

Here are some examples:

• When we move HQ building, there is a risk we won’t be able to sell the old property
• There may be a technical problem with the AV equipment at the conference we are organising
• Our new product launch could be delayed by problems with the point of sale materials

All of these are real concerns, but each is the outcome of many individual risks.  By writing the concern into the fish head, you can then use your fishbone diagram to identify potential causes of the outcome.

Each of these causes is a risk that you can manage: each will have its own likelihood, impact, proximity and mitigating strategies.

The “so what?”

Don’t accept risks onto your risk register that you cannot manage, because they are too woolly or general; focus your risk management on causes, not outcomes; try out the fishbone method as a way to find causes in your risk analysis.

Kaoru Ishikawa

.

Read more about Kaoru Ishikawa,
inventor of the Fishbone Diagram.

.