Using the Small Project Management Guide – Part IV: Project Risk Management

Welcome to part four of the five-part series on how to use the Small Project Management Guide. This week we will discuss risk management which is my favorite project management topic. I’ve included several risk management tools in the Small Project Management Guide. I believe that Andy is a bit skeptical about these tools because he states:

“When conference panelists are asked, ‘How did you accomplish your project?’, they’re #1 answer is: ‘Take a risk. Just get started.’ But I’m not sure I’ve ever heard someone say, ‘Create a risk register and review your impact grid.’ C’mon – do you REALLY do that (including the whole red, yellow, green stop sign thing)? Tell me a story.”

The first thing to know about risk in project management is that it can be either good or bad. Risk in projects is simply the possibility of deviating from the project plan. If you are doing a home improvement project and you estimate that it will take a couple of weekends you may finish in one weekend because the weather was much better than planned for. That is a good risk. Or the home improvement project took two months because your helpers never showed up or you couldn’t get the parts you needed when you needed them. That is bad risk.

The kind of risk Andy is talking about is different because he is referring to the reason why you do a project. Starting a new business is a risk as is creating a new website. You are attempting to make a change from the status quo and that is inherently risky. I know several folks who have big dreams of starting their own business, climbing Mount Everest, or traveling through Asia. I agree with Andy that these folks should just go ahead and do it if that is what they really want.

But that doesn’t mean that you should then pack a few clothes, a tent, some rope, and then head on out to Mount Everest this afternoon. You want to spend some time planning the trip and planning the climb to minimize the risks that will prevent you from achieving your big risk of climbing Mount Everest. That is why you use the tools like the risk impact grid and risk register. Starting a business is risky enough without further increasing the risk by proceeding without a well thought out plan.

Back in 2006, I was part of a group that put on a one-day workshop and trade expo for regional businesses in the Louisville, Kentucky area. This was second such expo for the group and, based on the success of last year’s expo, they wanted to make this bigger and better. I was the co-chair and I took on the role of technical director and risk officer. I had a large Risk Register that I continually added to, created a major Risk Impact Grid, and brainstormed with the group contingency plans for every identified risk event with potential significant impact.

The key word here is “identified.” No matter how well you plan there will be risks that you never anticipated let alone planned for. These are the “unk-unks” or unknown unknowns. That is why I can understand when some say just take the risk and do it. If you can’t plan for every risk then why bother planning at all. Just handle the risks as they come.

My answer is why increase the risk burden to your project? If there are risks you can anticipate and plan for that frees up resources to handle the unk-unks. In the case of the Regional Business Expo (RBE), I am glad I did because there were plenty of unk-unks in that project.

To start with, three months before the RBE the Treasurer absconded with $2,500 from the fund. Didn’t see that one coming. Luckily the new Treasurer was able to shift around the cash flow so that we could still meet our commitments for the venue and catering. Then a week before the event, our keynote speaker who was a prominent business leader was let go from his position in a very public way. He stayed on as our keynote speaker and gave quite a good speech which was fortunate for us because we had no backup speaker (a foreseeable risk that I should have had a plan for).

Two days before the conference I received all of the projectors and the ten laptops we needed for each of the workshop rooms. Earlier that week I had compiled all of the PowerPoints into one folder and was ready to load the laptops with the presentations. I had two backup projectors and three backup laptops so I felt ready for any eventuality regarding the presentations.

Except I never anticipated that the laptops would have Open Office instead of Microsoft Office. Open Office (free alternative to MS Office) does have a PowerPoint equivalent that can open and display PowerPoint files but did not at the time have the same sophisticated animation functions as PowerPoint. Thus, I spent the night before the conference checking each presentation and modifying the ones that required animation effects. As you can imagine I had some very unhappy presenters. But we were still able to hold all of the sessions as planned.

The most memorable unk-unk on that day of unk-unks was the clicker issue. In the main hall for all of the major speeches we discovered that the slide show remote did not have the strength to signal across the 35-feet distance from the stage to the control booth and advance the slides. So I positioned a volunteer just off stage of the speaker. Whenever he observed the speaker press the clicker button he was to wave at me. I was stationed at the door of the control booth and when I saw the wave I would wave back to acknowledge the signal and tell the control booth operator “next slide.” Improvise, adapt, and overcome.

Despite the unk-unks the RBE was a major success because of good risk management. We handled a lot of emergencies that day with confidence and little disruption because we had a plan in place and even rehearsed responses for the most common risk events. This freed us up to handle the unk-unks as they occurred and prevented any of them from becoming a show-stopper.

Every project is unique because it involves change and change is inherently risky on its own. Yes, take the risk and start that business, put on that event, or whatever you want to do. But use good risk management planning to help you make the initial risk decision successful.

In the fifth and final part, we will discuss how to communicate effectively in your small project and how to control the small project so you will reach a successful completion. Thank you for using the Small Project Management Guide.