Tag Archives: Risk management

The Risk Management Process

A short (under two minutes) video blog, introducing the simple four step process for managing project risk, fully described in my new book, How to Manage a Great Project.

How to Manage a Great Project

Go to the How to Manage a Great Project website

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How to Manage a Great Project by Mike Clayton

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Risk – and How to Handle it

The Best You April 2013 CoverThe April 2013 edition of “The Best You” features my article on Risk Management: “Risk – and How to Handle it“.

You can read it in the online version of the magazine here (you will need to register for a free subscription to the online version) or you can download a free pdf version of the two page article here.

The article is adapted from one of my regular free email newsletter/tip-sheets: “Thoughtscape“.  You can review the full Thoughtscape backlist here, and subscribe to it here.

Risk - and How to Handle it - by Mike Clayton

The Origins of Project Management

For many years, I have asserted that project management goes back to the pyramid builders and even earlier.  I like to imagine an ancient Egyptian official sketching a work breakdown for his (it would have been a man then, I am sure) Pharaoh (though this may easily have been a woman) on papyrus.

Who knows?

But we can answer a related question: when did project management appear in the literature.  Thanks to Google’s wonderful resource, we can easily search millions of books in English for references.

Project

Let’s start with the word “project”.  I consulted my trusty Oxford English Dictionary* first.  The word’s original usage (now extinct) was:

“a plan, draft, scheme, or table of something; a design or pattern according to which something is made”

This goes back to the early fifteenth century and therefore predates Google’s earliest data. Google cannot (yet?) distinguish between meanings and usages of a word, but there is clearly a continuity of evolving meaning, so this chart of usage is informative.

(You can click on these charts to enlarge them)

Ngram 01: "project"

But only to a degree, because it does not distinguish the noun (which we are interested in) from the verb (which we are not).

But notice the apparent increased usage from around 1920.  Let’s have a look in more detail.

Ngram 02: "project"

What is causing that? Could we be seeing the start of modern project management? Let’s find out?

Project Management

 

Ngram 03: "project management"

 

I think the answer to that question, is maybe, but not likely.  What I think is fascinating about this chart is the bump during the closing years of WW2.  Is it a statistical, lexical coincidence or was the phrase first getting used then?

We can also distinguish between British and American English usages of Project Management.

British usage is the upper chart; American the lower.

Ngram 04: "project management"

 

Change Management and Risk Management

Risk management seems to have taken off in the 1970s…

Ngram 05: "risk management"

 

… whilst change management started to thrive in the 1990s.  Hey, I was in right at the start!

Ngram 06: "change management"

Would you like to play Ngram?

You can do your own research and feedback your insights to the comments below.  Generate your own Ngrams at http://books.google.com/ngrams/ 

Please let me know what you discover and, if you create your own Ngrams and blog about them, link back to here, please.

Warning: Playing with this tool is extremely distracting.  Do not do it when you have more important things to do like work, exercise, eating, or sleep.


* Yes, as an author, I felt I had to have a copy of the full OED – although I did get it secondhand, in the Compact format, photographically reduced to nine pages per page and supplied with a big magnifying glass.

Six Strategies for Managing Risk

Managing risk requires active engagement with the potential event: you need to create a plan and execute it.  You must then review the outcomes and refine your plan if necessary. The rinse and repeat, as it says on my shampoo bottle.

Building a plan means selecting from a wide range of possible actions.  But those choices all stem from six core strategies.  Here is a video (of 6½ minutes) of me speaking on this subject to an audience in London.  This was at one of my standard three-hour seminars, which I delivered here to an open audience, for Bite Size Seminars.


This extract from my popular Practical Project Management seminar shows me talking about the six strategies for managing risk. These are fully described in my book, “Risk Happens!” and also referred to in my popular book “Brilliant Project Leader”.

More about this and my other project management seminars at http://mikeclayton.co.uk/a-choice-of-vibrant-seminars/project-management/

For all of my seminars, see http://mikeclayton.co.uk/a-choice-of-vibrant-seminars/

Project Goals and Objectives

Projects start with a goal, an aim, a reason for doing, changing or making something.

Your first stage in building a project is defining what that project is and, at the heart of that definition are three concepts: Goals, Objectives and Scope.  I will talk about Scope in my next blog, but here, I want to focus on Goals and Objectives.

Although dictionaries are not clear on the distinction, I think that these are two different concepts and that the distinction is important to us as project managers.  Whether you buy my definitions of the terms or not, the two questions that they evoke are crucial to a proper definition of a project and are therefore vital to its success.

Here is a video (of just under 4 minutes) of me speaking on this subject to an audience in London.  This was at one of my standard three-hour seminars, which I delivered here to an open audience, for Bite Size Seminars.


This extract from my popular Practical Project Management seminar shows me talking about the distinction between project goals and objectives – both vitally important in defining your project from the outset. These are fully described in my books, “Brilliant Project Leader” and, from a perspective of pre-empting project risks, “Risk Happens!

More about this and my other project management seminars at http://mikeclayton.co.uk/a-choice-of-vibrant-seminars/project-management/

Who Stole my People? Five Ways out of the Nightmare of Resource Theft

We have all been there.  By “all”, I mean any experienced Project or Programme Manager working in the real world of competing projects and territory-hungry sponsors and “C”-level executives.

Alpha and Zeta

Let me offer a basic scenario: your Project Alpha is one of several running within your organisation and, you are pleased to say, it’s running pretty well.  So what are the great rewards and honours that are coming your way as a result?  Well, not so fast!

Instead, when Project Zeta starts to run into problems due to bad planning, bad luck, bad leadership or some perfect storm of all three, its increasingly desperate sponsor comes knocking on your door.  Not for sage advice or the wisdom you have carefully accumulated.  No, what they want is your most precious resources: your people.

A Widespread problem

Organisations that juggle multiple projects (and which ones don’t) all face this problem.  There is a constant scramble for scarce resources with particular skills, experience or simply for those people in our organisations who just get things done.  This has a corrosive effect on your ability to deliver your projects effectively but, perhaps more important, it hits hard at the organisation’s long-term ability to deliver strategic change.

What, then, is to be done?

There are many components to a working solution to this and none is an easy or quick fix.  Implementing them all in conjunction with one another, however, will have a profound effect on your organisation’s ability to deliver strategic change and therefore to stay agile, retain value and build contribution.

Strategy 1: Selecting Well

Portfolio management and the ability to select a balanced set of programmes and projects that can be delivered within your resource constraints is the first and most strategic approach.  Select your initiatives well, not only to match them to your resources, but also to create a clear case for supporting them against other, operational, pressures.

Strategy 2: Planning

No surprises here but, truly, how many project and programme managers really invest the time and energy needed to develop a robust plan, with tested estimates and prudent contingencies, for their resource requirements.  I know you do, but if every PPM in your organisation did too, then there would be far fewer problems.

Strategy 3: Central Control and Governance

You want a resource: you come and see the top banana.  This is not about creating a bureaucracy, a power base or a roadblock.  It is about recognising that if people really are your most valuable resource, then like the gold at Fort Knox (is there still gold at Fort Knox?), it needs to have someone strong guarding access.  This is about good governance and the ability for one, suitably qualified and senior, person or group to make strategic judgements that give all of the projects and programmes their due weight.

Strategy 4: Contingency

I know that no organisation in its right mind will employ people to twiddle their thumbs until an emergency arises…  except, maybe, the fire service, or the ambulance service (they are separate in the UK), or the army, or the coast-guard, or…

Okay, so some would and we willingly, as a society, make those investments – and that’s what they are – to manage risk.  So aim to have some surplus resource available at times of pinch points in major programmes or projects.  Central planning of resource calls should allow this.  Think of it as an investment in risk management for your portfolio, rather than as an overhead on your salary bill.

Strategy 5: Change the Culture

One of the driving cultural norms is that senior executives are rewarded for delivering their projects or programmes to time, cost and quality.  This causes parochial behaviours and the development of neo-mediaeval fiefdoms within organisations.  Instead, create shared accountability across a whole portfolio.  In mediaeval France, kings stopped their Counts and Barons warring with each other by calling them all up to fight wars with other states.  Now, they need to negotiate with a war council for the men and machines to fight on the front to which they were directed.  This worked, and it can work in modern organisations.  It is not so much divide and rule as unify and lead.

What other strategies are there? 

Please do add your own strategies in the comments.

Top Ten things to build into your Project Contingency Plan

A contingency plan is a valuable part of your risk management. Whilst it won’t stop risks happening, nor even make them more likely, it will give you a clear set of steps to follow if it does happen. This will allow you to rapidly restore control and limit the potential for consequential threats. But what tactics can you put into a contingency plan? There are very many, but here, we sample ten of the best.

1. Create a schedule contingency, or “float”

Build extra time into your programme to allow you to absorb the delays that a realised risk can generate.

2. Identify options for extended working hours

If things go wrong, it will need to be all hands to the pump. So look at where you can generate a little extra work time if needed. Never use up this potential extra time by scheduling it into your baseline plan.

3. Look for non-dependent later activities that could be re-scheduled

If you need to turn your attention to the issue that’s arisen, know in advance what planned activities you can put off until later, without affecting your critical path and hence your completion date.

4. Identify non-critical activities that could be dropped

You may be able to do better than delay some activities… Are there any discretionary activities that can be cancelled entirely without compromising core functionality or essential quality standards?

5. Research off-the-shelf solutions that could be bought in

If you lose time, then you may want to save it again by buying ready-to-use components. If you find yourself over-budget, you may be able to buy less expensive generic components that have lower but acceptable levels of functionality.

6. Create budget contingency

Always squirrel away a small amount of budget as a contingency against troubles. Whenever you make a saving, keep it in reserve.

7. Identify non-critical activities, or deliverables that you could de-scope; reducing functionality or quality criteria

This will be an uncomfortable compromise, but if you know from the outset where stakeholders’ priorities lay, and the relative influence of different stakeholders, you can compile a hierarchy of specifications according to their priority, and hence know which ones you could compromise, if you have to.

8. Build test and remediation time into your plans

Things will go wrong, so it is far better to find them in planned test time and to fix them in scheduled remediation time. And if you have fewer failures than you anticipated, you will have the up-side risk of finding ways to use the extra time profitably.

9. Secure expert evaluators

Some projects are susceptible to deep expertise or experience and bringing this in at well-chosen points in your project can be an investment worth making. Know who you could call upon quickly if things go wrong and you can cut your remediation time and cost significantly.

10. Put in place effective change control procedures

Change upon change is chaos, so a project with no control over changes in scope, quality or specification detail is almost certain to encounter problems. And, in addition, without change control, your project governance is severely compromised.


Risk Happens! by Mike ClaytonLearn more about how to build a project contingency plan, 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.