Risk Management Archives

Can You Do Time Estimation Without Making Assumptions?

time estimation

When planning to begin an exciting new project, project managers are often asked, “how long will you take to complete the project?”

Time is a finite resource since our life-span is short. Even if we try to, we cannot escape the limitations of time. This is why estimating time is among the essential aspects of managing projects.

Sometimes, project managers are not asked about the estimation but a deadline is forced down their throat. The client or their manager just directs them to complete activities by a specific prescribed date.

Generally, when a deadline is imposed, most project managers try to finish the job within the specified time frame.

They do everything in their power to meet the deadline but this too should not be done without estimating. The estimation should be still done even when somebody has set a deadline for you. You should back-calculate and try to fit in your tasks within the available time. This is a difficult job but not an impossible one.

Let us try to answer one basic question about estimation – can duration estimation be done without making assumptions? (more…)

By Praveen Malik|2023-05-22T06:37:52+00:00September 29th, 2022|Project Management, Risk Management, Time Management|0 Comments

Why Is Importance Of Project Risk Management Overrated?

Have you ever given a serious thought about the importance of project risk management? Do you think that risk identification, analysis and assessment are important for project management?

I believe you will answer the above questions in affirmative. Before I share my opinion about significance of risk management, let me tell you a small story.

Proper Risk Identification, Analysis, And Assessment In Corporate Projects

Morpheus was the most experienced project manager of Zion Corporation. In past, he had successfully completed many technically challenging projects. Customers love him for his strong analytical skills.

In the recent years, Zion has sustained heavy losses due to poor risk management. They hired a new CFO named Lock to turn the corner. Lock was a micro-manager and looked at everything from financial standpoint. This had given him lot of success in the past.

To turn Zion around, Lock initiated a novel project of developing a complex new game system called Matrix. He assigned Morpheus as the lead project manager. He also assigned senior analysts Neo and Trinity to assist Morpheus.

Morpheus enjoyed a good working relationship with Neo and Trinity. They had worked together on many projects in the past. But Lock was a new commodity. Morpheus soon realized that it was very difficult to work with him. Lock had little understanding of the game development and always wanted to talk about finances.

As a diligent project manager, risk management was on top of Morpheus’ mind. He was ably supported by both Neo and Trinity in identifying, analyzing, and resolving risks. But Lock did not appreciate their efforts. On the contrary he was very critical.

Lock would say risk management is a complete waste of time. He thought that professionals should stick to their jobs and solve real problems. They should spend more time of execution and overcome the problems as they come.
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By Praveen Malik|2022-11-18T10:19:57+00:00January 9th, 2019|Risk Management|0 Comments

Project Management Risks – Questions and Answers (Part 2)

In my previous post, I’ve addressed the first three questions on risk management and here I address the other two and, at the end, provide a list of take-home messages.

4. How many risks should be on your risk log and for how long?

It depends on the project size, type, complexity, and any other factor that could influence your project. However, in order to be on your risk log, a risk needs to be identified, analyzed (its probability and impact quantified), and mitigation measures applied. Assign a risk owner to each risk. This person is responsible and accountable for monitoring that risk and for defining and implementing mitigation measures.

As you can imagine, not all identified risks will be worth of listing in the risk log, as some risks are just too minor to be worth the cost, or time, of mitigating them. In general, the cost of mitigating a risk should be lower than the cost of the risk consequences if the risk does occur. Importantly, you should never delete risks from the risk log. Even a risk that has occurred can occur again, if not in this project, then in future projects of the organization. In this second case, the risk log becomes a lessons learned piece of documentation.

5. How do you manage project risks?

Risk management is something that needs to be done continuously, throughout the project, not only at the beginning. A project’s success depends on commitment to risk management. Make sure everyone is aware of risk management and appoint risk owners for each risk in the risk log. Regularly review risks, as any change to the project can add new risks or modify the impact and probability of the risks you previously identified.

Manage risks systematically using risk management techniques:

Avoid risks. If the project is too risky, the sponsor might decide to cancel the project altogether or modify it to remove the major risks. For this, make sure the sponsor is aware of the risks to the project. Take into account that some sponsors might decide to accept the consequences of some risks.
Soften the negative risks’ impact and maximize the positive risks’ consequences to the project.
Transfer the risk to a third party (by insurances, guarantees etc.). The risk will still be present, but you’ll have mitigated its consequences by transferring it to another party, usually for a cost.
Accept minor risks (those with low probability and low impact) and their consequences if the cost of mitigating them is too high.

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By Cristina Neagu|2023-05-22T06:38:08+00:00July 2nd, 2015|Risk Management|0 Comments

Project Management Risks – Questions and Answers (Part 1)

Project Management Risk “To save all we must risk all”, Friedrich Schiller once said. If he were a project manager today, he might say, “To save all we must manage all risks”. Books, journals, corporate websites, YouTube, and discussion forums burst of information on risk management, because risk is inherent to every project just like uncertainty is inherent to any risk. Risk management is essential if you want your project to succeed. This article answers five questions on project risk management:

What is the best definition of project risk?
What’s the difference between a risk and an issue?
How do you identify risks?
How many risks should be on your risk log and for how long?
How do you manage project risks?

1. What is the best definition of project risk?

One of Oxford Dictionary’s 1000 most frequently used words, risk refers to the possibility of something unpleasant, dangerous, or harmful occurring. This negative connotation of risk is so deeply rooted in many people’s minds that it takes some effort to get used to the project management definition of risk: “an uncertain event or condition that, if occurs, has an effect on at least one project objective,” according to the PMBOK.

Risk can be any uncertain event that, if it happens, will be good or bad for the project. Negative risks become threats to the project, while positive risks become opportunities. Risk management should address both types of risks, minimizing threats and maximizing opportunities.

Project risk is something you can control. You must manage risks if you want your project to succeed. However, be aware that there are risks called black swans that you cannot include in your risk analyses. I’ve explained why these risks are special and what you can do to minimize their consequences in another article.

2. What’s the difference between a risk and an issue?

A risk is something uncertain, so it will happen or not during your project. An issue is an event that has happened or that you know for sure it will happen, even though you might not know when. A risk that occurs becomes an issue. This might be bad news or good news for you and your project, depending if the risk is negative or, respectively, positive. A positive risk becomes an opportunity for your project—for example, the opportunity to finish earlier than scheduled, or below budget, or anything that you might otherwise consider “lucky”. Both risks and issues have causes and consequences. Risk management is the way to deal with risks while problem solving is the way to deal with issues. (more…)

By Cristina Neagu|2022-11-18T10:20:02+00:00May 11th, 2015|Risk Management|2 Comments

Brainstorming – Trendy or Not?

It’s popular. It’s a classic. Those who endorse it say it’s an effective technique for generating many ideas but not a standalone method, so it should be used with other creative techniques. Those who criticize it say it generates mediocre ideas that are likely never implemented as solutions to problems. But this 60-year old technique called brainstorming – whose effectiveness is an evergreen hot topic among researchers, users, and critics – helps to identify project risks.

Brainstorming – The Definition

According to Merriam-Webster, brainstorming is “a group problem-solving technique that involves the spontaneous contribution of ideas from all members of the group; also: the mulling over of ideas by one or more individuals in an attempt to devise or find a solution to a problem”.

Brainstorming – The Story

A technique with a catchy name, brainstorming has been around since the 1950s when Alex Osborn’s book Your Creative Power was published, becoming a best-seller. This book may be “an amalgam of pop science and business anecdote”, as Jonah Lehrer called it in a New Yorker article that triggered lots of e-ink on discussion forums, but brainstorming is easy to implement and generates many ideas. Besides that, it’s a great team-building exercise, which may also justify its popularity with businesses. A brainstorming session emphasizes the quantity, not quality, of ideas and one of the rules to brainstorming sessions is no criticism so that people do not fear their ideas are rejected by the group and, thus, limit their imagination.

Brainstorming Types

There’s individual and group brainstorming, with individual brainstorming being better for problem solving and group brainstorming better for identifying project risks. Group brainstorming draws from the intelligence and experiences of more people but ideas expressed loudly may be biased since people do worry about others’ opinions even if one of Osborn’s rules for group brainstorming is “no criticism”. Online brainstorming—a sub-type of group brainstorming—uses e-brainstorming tools to help remote teams share their ideas in real time. (more…)

By Cristina Neagu|2022-11-18T10:20:02+00:00January 16th, 2015|Business Management, Project Management, Risk Management|0 Comments

Preparing for the Inconceivable Risk—Are You Ready for Black Swans?

Black swan risk When rare and extreme events never observed before occur, they have major consequences and sometimes even global impact. World War I, AIDS, 9/11, but also the advent of Internet are all black swans, or extremely rare, unprecedented events with inconceivable consequences. The term black swan was coined by the philosophical essayist Nassim Nicholas Taleb in the book The Black Swan: The Impact of the Highly Improbable. Taleb uses the term black swan to refer to extremely rare, very difficult to predict, and massive-impact events. Zooming into the realm of project management, when negative black swans (unconceivable risks, extremely unpredictable, and improbable) occur, they lead projects to failure.

How can Managers Plan for Black Swans?

Inherently, black swans cannot be forecast—they are unique events that are not in statistics and their total impact on a project is impossible to predict, which makes them most dangerous to any project. While managers cannot plan for such risk, simply taking no action and hoping a black swan doesn’t strike their project is not the wisest thing to do. But if they cannot plan for the unplanned, what can they do?

Grey Swans vs. Black Swans

First, managers can learn to distinguish black swans from grey swans and prepare for these. Not all project failures are due to black swan events, but to grey swans, which are rare but predictable risks. Professor Elisabeth Paté-Cornell from Stanford argues in an article in Risk Analysis that black swans are extremely rare, but people in industry and finance often use black swans in the aftermath of a disaster as an excuse for poor planning. In my opinion, this may also happen in many major IT projects that fail, for example those going over budget by 200 percent and over schedule by 70 percent—surprisingly, a situation that strikes one in six projects according to the authors of a Harvard Business Review article. Although managers blame black swans for such project failures, often their risk analysts have failed to factor in grey swans. Identifying and mitigating grey risks should be part of effective risk management. (more…)

By Cristina Neagu|2022-11-18T10:20:05+00:00August 1st, 2014|Risk Management|Comments Off

Recognizing and Avoiding Project Team Burnout

“Death march projects are the norm, not the exception,” says Edward Yourdon, the author of the Death March, a book about surviving highly stressful, irrational projects in the software industry. Many organizations promote “death march” projects – those with unrealistic goals and schedules – to keep up with the competition in their respective industries. As a result, project teams work overtime to meet unrealistic goals and schedules, sometimes with insufficient resources, only to reach the burnout phase. The productivity declines, the absenteeism rate increases, and the team is unable to meet requirements. A burnout team means that the employees’ job satisfaction diminishes and that they cannot perform their tasks and meet deadlines. The consequence is a failed current project and a high probability of failure of the next project.

Recognizing team burnout and taking steps toward avoiding it are essential for avoiding cost repercussions for the organization.

“Burnout can be defined as feelings of exhaustion, a cynical attitude toward the job and people involved in the job and through a reduced personal accomplishment or work efficiency,” according to a dieBerater report.

Many things can trigger team burnout besides death march projects. These include poor project planning (cost, time, and resources), customer changes, micromanagement, high workload, time pressures, insufficient project manager support, as well as insufficient training and decision-making opportunities.

Exhausted teams tend to focus on achieving the results by working harder rather than smarter. The team members fail to use creativity to develop efficient solutions, so they become frustrated, communicate less, and work inefficiently. (more…)

By Cristina Neagu|2022-11-18T10:20:06+00:00April 9th, 2014|Project Management, Resource Management, Risk Management, Team Management|1 Comment

5 Reasons Even a Small Project Needs a Project Manager

Why hire a project manager for running a small project? “The team can multitask; they just need to organize their workload.” “The project is simple; the team needs no leadership – they just need to get the work done.” “We can spare no money; a project manager is a luxury we cannot afford.”

A project manager may seem an extra cost to the organization, but in reality, a good project manager helps to keep the cost of the project low, the customer’s satisfaction high, and the risks to the project under control. If an organization wants its small project to succeed, that project needs a project manager. If resources are limited, a part-time project manager might be the choice. Indeed, some small projects may be simple, and team members can, and usually do, multitask, but the need for a project manager remains. Project managers do more than just organizing the work of the team members. Here are just five reasons even a small project needs a project manager.

Large or small implies the same constraints

A small project is no different from a large project in terms of constraints like cost and time. All project constraints must be taken into account for the project to succeed. To complete a project in time and within budget means the team needs to work efficiently. But usually the project team is more focused on making the deliverables successful than they are focused on making the project successful. The project manager focuses on both the success of the deliverables and the success of the project. By taking the burden of project management from the team members’, they can fully focus on executing the project. The project manager manages the project so that the team can manage the work.

Planning is a must

It is too easy to skip the planning phase of a small project. Because a small project is considered simple, the team might be tempted to skip planning and start working on the deliverables. But the lack of planning triggers rework, missed deadlines, and schedule delays. The motivational speaker Brian Tracy said, “Every minute you spend in planning saves 10 minutes in execution.” The project manager plans the project so that the team can efficiently execute the work and complete the deliverables. Ideally, there is no rework and, thus, the team spends less time on the project, which translates into lower costs for the organization. (more…)

By Cristina Neagu|2022-11-18T10:20:06+00:00March 13th, 2014|Project Management, Risk Management, Team Management|Comments Off

Fixing a Project that is Behind Schedule

project behind schedule A project being delayed may seem a reason to panic but schedule slippage is not as rare as some might expect. Depending on the project, there may be things that can be done to fix a delayed project. In some cases, however, there is no choice other than cancelling the project. Before listing any solutions, there are things that should not be done, at least for most delayed projects.

Just Work Harder?

A simplistic solution for a delayed project is putting up more effort to catch up with the schedule. Some claim that this is as easy as estimating how behind you are and how faster you need to go to catch up. But doing more in less time is only possible if the team has not operated at their full productivity so far, or has not used the most efficient tools possible, and the project being delayed is only a question of improving efficiency or simply the work climate. Overtime work may be a solution but only for a limited amount of time and in the right environment. It actually creates a negative work climate, which has a detrimental effect on the schedule. So is there a way to fix a delayed project?

The Cause of “Evil”

As with all problems, minimizing or cancelling the symptoms does not eliminate the cause and the problem re-emerges. You need to identify the cause of the discrepancy between schedule and reality. You cannot tell that from analyzing the schedule unless there is a specific task that is causing delays or an artificial task dependency. In the first case, add expert resources to bring back on track the delayed task. In the second case, eliminate the artificial task dependency.

3 Ways to Fix a Delayed Project

If you find out that the project schedule is slipping because you have an unclear scope, or a scope creep, you have a serious problem and the project is likely a death march. However in many cases, the team is very good, all tasks were done efficiently, but the project schedule was very optimistic. If it is so, discuss with the management and project sponsor and look for solutions: (more…)

By Cristina Neagu|2022-11-18T10:20:07+00:00July 31st, 2013|Project Tracking, Resource Management, Risk Management|1 Comment

Project Team Productivity – Problems and Solutions

Team productivity is a source of risk in any project. Low team productivity can trigger other issues, including schedule delays, unsatisfactory quality of the deliverables, low team morale, which, in turn, can all lead to the project’s failure. The project management approach, the project manager’s skills, the changes in project scope are some of the risk factors for a team’s productivity. But often the issues and conflicts that arise from the team itself are the causes of low productivity. The productivity can suffer when the teams are distributed rather than collocated, and when there are cultural differences among team members, since both situations can generate conflict and miscommunication.

Collocated vs. Distributed Project Teams

Since creating a cohesive team depends on how the team members communicate and bond with each other, there can be significant differences in productivity between collocated and distributed teams. In collocated teams, communication is facilitated because all team members are physically in the same environment. However, with the modern communication technologies, including videoconferencing, e-mail, and VoIP, distributed teams can also communicate effectively. As a technical report from Victoria University of Wellington, New Zealand, demonstrates, one of the problems in distributed teams is that members do not bond as easily as the members of collocated teams do, so it can be difficult for collaborators to trust each other. As a result, the teams do not work effectively together, which is likely to decrease productivity and even generate conflicts. There is obviously no quick fix for this problem.

Risks to Productivity in Agile Projects

Having a cohesive team that works well together is crucial especially in agile projects, where the teams are self-organizing and even cross-functional at times. On the one hand, having distributed teams is becoming necessary for many organizations in order to keep their costs low, find the best talent, and keep up with the their competitors. On the other hand, having distributed teams in agile projects adds a new layer of complexity to the project, not only because the teams are self-organizing, but also because daily meetings can be difficult with local time differences. The productivity can suffer. The role of the project manager, if any, is crucial. This person needs to be a leader and be able to motivate the team to work effectively, solve issues when they arise, and prevent conflicts. In large agile projects, organizing the distributed team in smaller teams, and having a project manager to facilitate communication between teams can be a partial solution. (more…)

By Cristina Neagu|2022-11-18T10:20:08+00:00May 23rd, 2013|Resource Management, Risk Management, Team Management, Time Management|Comments Off

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