Intro: Welcome to the E6S-Methods podcast with Jacob and Aaron, brought to you by E6S Industries, your source for expert training, consulting, and leadership in business performance and continuous improvement methods, like Lean and Six Sigma. In this episode number 84, we give an overview of the process of project risk planning. "Failing to Secure Risks, Risks Securing Failure" Here we go. http://bit.ly/E6S-084; http://bit.ly/E6S-iTunes

***Failing to Secure Risks, Risks Securing Failure***

Objection 1: can't possibly plan for every risk

Counter 1: That’s true. But that doesn’t mean you plan for none. And risk planning is continual throughout the life of a project. Mostly try to be proactive, but also will need to be reactive.

Objection 2: Planning for risks is too bureaucratic and delays getting started

Counter 2: In a low risk situation, feel free to jump in. Risk planning also serves to help align team members and stakeholders with the mission and get a sense for what to lookout for regarding risks, emphasizing the importance and urgency to identify, report, and to react to risks right away. It is a bureaucracy, but then again so is every effort of collaboration between more than one person.

I Risk Identification

a. brainstorming potential risks, list of typical project risks to scope, schedule, budget

i. What can go wrong?

ii. What are your major assumptions?

iii. What if…?

1. What if this major milestone is late?

2. What if this major milestone is early?

3. What if this resource is no longer available?

4. What if these resources are incapable or some quality issue arises?

5. What if this stakeholder gains in power, support or engagement?

6. What if this stakeholder is reduced in power, support, or engagement?

7. What if these relationship dynamics are ineffective?

8. What are the potentially external risks?

a. Seasonal planning

b. Market conditions

c. Local economy or social factors

b. Example Risk: Bargaining Unit labor contracts end within the duration of the project

i. Potential for work stoppage, lose resources from project

ii. Potential delays due to distractions with contract negotiations

iii. Potential quality issues due to unqualified workers filling in

iv. Potential for sabotage from disgruntled workers

II Risk Analysis prioritizing risks

a. Absolute Prioritization - How big is the risk?

i. Scale 1-5 on Impact and Likelihood; Composite scoring

1. FMEA

2. Modified C&E Matrix

ii. Grid prioritization (high, medium, low) Impact and Likelihood

1. Graphical based on Scoring or Placed based on Consensus

b. Relative Prioritization

i. Rank, Rack & Stack

ii. Iowa State Prioritization Template – collaborative paired comparison multi-voting tool

1. Interesting concepts. Somewhat misses the mark in execution.

a. Summing rows vs. columns doesn’t quite translate into prioirty

2. https://www.it.iastate.edu/docs/risk/prioritization.xls

c. Example Risk: Bargaining Unit labor contract expiration

III Risk Planning

a. What will you do about them? mitigating risks

i. Brainstorm Solutions

ii. Choose a solution

iii. Specify Details pertinent to the solution and project impacts

1. Summary of the risk mitigation plan

2. Impact on project schedule, scope, or budget

3. Specific actions (responses) intended to mitigate risk

4. Implementation Schedule Clear entry and exit criteria for each response

5. Action owner

6. Dependencies among responses

7. Resources

8. Integration of responses into the Master Schedule

b. Example Risk: Bargaining Unit labor contracts end within the duration of the project

i. Potential for work stoppage, lose resources from project

1. Actions: Contingency contract with vendor to substitute in case of a strike

ii. Potential delays due to distractions with contract negotiations

1. Actions: Adjust scope and schedule to accommodate for the distractions. Move critical path items earlier in the schedule.

iii. Potential quality issues due to unqualified workers filling in

1. Actions: Initiate training preparations several months before the potential strike. Contract qualified coaches to supervise activities.

iv. Potential for sabotage from disgruntled workers

1. Actions: No actions. Low likelihood. Be prepared to react, if necessary.

c. Risk Management Plan

i. High level procedure on how the project team will address project risks. Works in coordination with the project Change Management Plan

IV Risk Handling

a. Implement Risk Handling Plan

b. Risk Handling Tactics

i. Risk Avoidance: change in the concept, requirements, specifications, and/or practices that reduce risk to an acceptable level.

ii. Risk Transfer: reallocate the risk from one part of the system to another.

iii. Risk Acceptance: accept a certain level of risk within the program without taking any special measures to control or reduce it. It is also known as Risk Assumption.

iv. Risk Mitigation: take action to lower the likelihood and/or consequences of a risk.

c. Residual Risk – Such level of risk remaining after handling. Cannot always eliminate the entire risk

V Risk Tracking - iterating risk planning

a. Check up on old risks

i. Example Risk Register

b. Plan for new risks

i. How are things going?

***Failing to Secure Risks, Risks Securing Failure***

Outro: Thanks for listening to episode 84 of the E6S-Methods Podcast. If you would like to be a guest on the podcast, contact us through our website. Join our mailing list! Subscribe to past and future episodes on iTunes or stream us live on-demand with Stitcher Radio. Find outlines and graphics for all shows and more at www.E6S-Methods.com. “Journey Through Success”