Sample: Week #1 of 52 Weekly Email Messages

Project Management Tip of the Week: Manage Risk

This weekly email contains project management tips to assist you in managing your project and your team. It serves as a reminder to manage projects with discipline and rigor - always in line with the size and complexity of the project. The content comes from the TenStep Project Management Process®and may be reviewed at www.TenStep.com.

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Positive Risk

We typically associate project risk with a negative connotation. However, there is a concept of opportunity risk or positive risk. In these instances, the project manager or project team may introduce risk to try to gain much more value later. For instance, a team may decide to utilize a new technology on their project because they think it will result in dramatic effort and cost savings. Of course, there is also a chance the new technology will not work. However, the team introduces the risk because the potential for gain. This is an example of intelligent risk taking or positive risk. However, from a definition standpoint, the TenStep Manage Risk process, and most project management methodologies, assumes that the risks we are managing are negative risks. They need to be addressed so that the underlying potential problem does not occur.

Alternatives Strategies for the Risk Response

Once risks have been identified, there are a number of options that the project manager might consider for responses.

1. Leave it. In this approach, the project manager looks at the impact the risk condition would have on the project and decides that nothing needs to be done to mitigate the risk. This approach should only be used for low impact risks or those that are unlikely to occur. This approach is dangerous for high and medium risks.

2. Monitor the risk. In this case, the project manager does not proactively mitigate the risk, but monitors it to see whether it is more or less likely to occur as time goes on. If it looks more likely to occur, the team must formulate a different response at a later time. This approach can work for serious risks that are not likely to occur. Rather than put a plan in place immediately, the project manager creates a plan only if it looks likely that the risk will occur. The advantage is that scarce resources are expended only on those risks that are likely to occur. The disadvantage is that the delay in addressing the risk might make it less likely that the risk can be successfully mitigated in the future.

3. Avoid the risk. Avoiding the risk means that the condition that is causing the problem is eliminated. For instance, if a part of the project has high risk associated with it, then the whole part of the project is eliminated. Risks associated with a particular vendor might be avoided if another vendor is used instead. This is a very effective way to eliminate risks but obviously can be used only in certain unique circumstances.

4. Move the risk. In some instances, the responsibility for managing a risk can be removed from the project by assigning the risk to another entity or third party. For instance, installation risks might be eliminated by outsourcing this function to a third party. The third party might have particular expertise that allows them to do the work without the risk. Even if the risk is still present, it now is up to another party to resolve.

5. Mitigate the risk. In most cases, this is the approach to take. Usually proactive steps must be taken if a risk has been identified to ensure that the risk does not occur. Another of the goals of mitigation is to ensure that the effect (impact) of the risk is minimized if it does occur. For the purposes of the TenStep Project Management Process, it is generally assumed that risk plans are established to mitigate the risk.

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