Common Project Manager Mistakes: #2 We Don’t Have Time for Risk Management

2PMCat477697695I was recently working with a neighbor (I’ll call him Gene) to help him plan a project at their home. They live in the country and have a small dilapidated barn that they wanted to replace with a building in which they could indulge their favorite hobby — beer making.

When we first started talking about the project, they were full of enthusiasm and planned to demolish the barn over an upcoming weekend. As we talked, I asked questions like: Are there any hazardous materials in the barn? Have you inspected the barn to make sure it will support us as we remove the roof and rafters? Is there clearance around all sides of the structure so that we can get in close enough to work properly? After about the fifth question, he gave me a perplexed look and said, “Man, you sure know how to take the fun out of a project. If I take the time to think of all of that stuff and figure it out I’ll never even get started.”

Unfortunately, that kind of response is not unusual or unfamiliar to even basic risk management questions, particularly when there is a pressing need for results. Risk management is time consuming and consequently costly but it is often more costly to rush forward without considering risk, because when the unexpected happens, we have to react, which involves delay, rework, and sometimes waste. In Gene’s case, not considering the areas of uncertainty means that important areas of planning might be overlooked; potentially impacting work, schedule, and cost expansion by unknowingly accepting significant liabilities related to property and safety.

Part of the problem is that Gene (like many) thinks of risk as interference to his plans and timelines. Additionally, he views risk management as separate activities that need to be done in addition to the routine planning activities he anticipated. So, how can I help Gene to effectively think about risk and still keep things moving efficiently toward removal of the barn?

Granted, some level of uncertainty is always present, which affects the project, and so it’s not possible to anticipate and address all uncertainties. The best way to manage risk is to simply include risk identification, analysis, response planning, and review as a routine planning activity. This means that all conversations with stakeholders should include considerations of risk. What could go wrong? What could break? What could make work more efficient? What might allow the team to finish earlier? When we routinely include attention to risk in all stakeholder discussions, we not only ensure constant and consistent focus on risk, but we also de-stigmatize the process so that stakeholders don’t cringe whenever the subject is broached. Removing the stigma from risk considerations has the additional benefit of improving the probability that stakeholders will identify opportunity risks as well as threat risks. Engaging stakeholders in this way also fosters awareness of a broader range of risks, with broader input received during impact analysis and effective response planning.

In other words, Gene should be noting my questions and concerns, their own doubts and questions, and the questions, suggestions, and potential problems identified by those with whom they have discussed the barn demolition. This approach would mean that questions like mine (about hazardous materials and clearances) along with his family’s questions (about the need for a demolition permit and safety) should be embraced as planning considerations rather than seen as obstacles to getting the work done.

The second step in risk management is the analysis of likelihood and impact from those risks that have been identified. When risks are recognized as a normal part of planning and executing a project, then the sources and quality of the expert judgment available to the analytical processes is also expanded and shared throughout the stakeholder population. This means that our stakeholders will generally have greater confidence by preparing for the unexpected and will be less likely to doubt the executed risk responses since they contributed to their definition and acceptance.

After a further conversation, Gene decided that the number of questions and suggestions he was receiving did warrant attention. One of his first discoveries was that our county did, in fact, require a permit for demolition and that the fine for not obtaining a permit was roughly triple the cost of the permit. He learned that the county would provide an inspection for hazardous materials at no charge as part of the permitting process, which took fewer than 10 days to complete. He also discovered lots of brush around the left and back sides of the barn, which upon further inspection revealed a poison ivy infestation. The large amount of poison ivy prompted him to spray with weed killer during the permitting process, which in turn, enabled him to remove the dead brush and poison ivy during the first demolition task, thereby avoiding (or at least mitigating) the related risk to volunteers who might have dropped out before the job was done due to uncontrollable itching.

When risk is a normal, routine and seamless part of all conversations with stakeholders, then the need for impact analysis and response planning occurs organically. This is clearly evident in Gene’s decisions. His family’s questions about permitting resulted in a decision to contact county officials, which led him to the permit application and process as well as a hazardous materials inspection. The process of permitting created the opportunity for Gene to pre-treat the brush around the barn and remove it from interfering with work or creating a health concern for his volunteer team of laborers. The permit enabled him to comply with prevailing law, confirm the absence of hazardous materials through a professional inspection, and avoid an inconvenient fine for violating county ordinances.

By engaging stakeholders and considering the risks they suggest (both directly and indirectly) as a normal part of the process for planning, the project manager completes a project with fewer interruptions and rework while maximizing efficiency and the advantages from opportunity risks.

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