Project Risks (Part 3): How to Quickly Assess Potential Pitfalls
by Adele Sommers, Ph.D.
Being optimistic is a wonderful thing, but being
overly optimistic in the face of unrealistic odds
can sabotage a projects success. Over-optimism abounds when
people view every project as a must-win effort while
failing to flag potential problems. In Part
2 of this series, we identified 10 types of risks related to
choosing, estimating, and staffing your projects.
After identifying the potential risks, the next phase
entails assessing to what extent the risks can negatively
affect your project in areas such as cost, schedule, quality,
or features. This article (Part 3 of the series) explains
how you can quickly evaluate any risks youve identified to
see whether theyre likely to overwhelm your project.
You May Have Flagged
Using the ideas in Part 2,
you and your team may have identified one or more concerns related
to a project youre weighing. Ten considerations appear below;
you might think of many others. If your answer to any question is
yes or even maybe
in relation to your project, it means that youve flagged a
1) Is the project non-compelling or a bad fit for the project
2) Will the project scope entail operating in unfamiliar territory?
3) Are project requirements, such as product features, complex?
4) Are the requirements pitted against an aggressive schedule?
5) Are too few personnel and resources available for the
6) Will coordination with many different collaborators be
7) Are the primary collaborators unfamiliar to the project
8) Are project team members discouraged from raising concerns?
9) Are there insufficient review and test cycles in the
10) Are there no standard protocols for managing scope changes?
Assessing the Risks Youve
Identified -- How Worrisome Are They?
Once you have a list of risks, you can next assess
them to find out whether they will be
mildly annoying or could wreak havoc on your project. This is a
quick and simple process for evaluating them.
1a. Start by giving
each risk a name or label.
Example: Imagine that your family has approached you about
redecorating your kitchen because your relatives are coming for
a family reunion the week after next. Your family believes that
several changes are needed, as follows:
* New faux paint treatment on the walls
* Resurfacing all of the kitchen cabinetry
* Laying new tile on top of the vinyl flooring
* Installing crown molding around the ceiling
available: Two weekends (four days) within the next 10-day period.
But you dont believe that's nearly enough time to complete
So, of all of the risks youve identified, you might label
one of them Too Many Features/Too Little Time.
This means that the project requirements are too numerous, too complex,
or both, given the time available.
1b. Next, describe
the kinds of problems this risk could cause.
Also ask how likely it is to occur. For instance,
if you're concerned that you won't have enough time in the schedule
to incorporate everything requested, what problems might it cause
whoever will be using the product, system, or solution? Are those
chances fairly high? Describing these concerns can help everyone
on your team agree on just how serious that potential risk is.
Example: Your relatives might arrive while the work is still
in progress, and the kitchen will be unusable. Also, if you bow
to the pressure to hurry, the quality of the work may be low. Both
of these problems are likely if your family members try doing the
work themselves, since theyre not skilled in home improvements.
2. Give each identified
risk a potential impact score or rating.
You can give each risk a High Impact, Medium
Impact, Low Impact, or No Impact score, based
on simple numbers you can derive easily. One way is to assign relative
values to the negative impact a risk may have on the project cost,
schedule, quality, and features with a different value possible
for each of these four areas. For example, a high negative impact
might be a 9, a medium impact a 5, a low impact a
1, and no impact a zero.
Example: Your kitchen redecorating project might earn scores
like those below.
Cost - You estimate that by doing the work yourselves, youll
possibly reduce costs (if you dont botch the job). So your
"Too Many Features/Too Little Time" risk might have a
medium negative impact on cost, for a score of 5.
Schedule - Since you feel backed into an almost unworkable
time frame, you expect a high negative impact on schedule, for a
score of 9.
Quality - Because you expect to rush through the project,
you anticipate a high negative impact on quality, for a score of
- Some features probably cant be completed, regardless
of how fast you go. You foresee a high negative impact on features,
for a score of 9.
The total score for all four areas in this example is 32,
very close to the maximum. When you complete the process for any
other risks you identified, you can compare this score with the
others to see which risks are of greatest concern. You can then
determine the priority order in which to mitigate them.
When you are finished with this phase, youll
have a set of named and assessed risks. Following this, Part 4 in
the series will explain how to brainstorm ways to avoid, eliminate,
work around, or otherwise mitigate each risk.
To download the related worksheet, click here.
About the Author
Adele Sommers, Ph.D. is author of Straight Talk
on Boosting Business Performance: 12 Ways to Profit from Hidden
Potential. To learn more about her book and sign up for more
free tips like these, visit her site at www.LearnShareProsper.com
This article may be distributed freely on your Web
site, as long as this entire article, including the links and full
About the Author section, are unchanged. Please send
a copy of, or link to, your reprint to Adele@LearnShareProsper.com.
Copyright 2005 Adele Sommers, The Enterprise Prosperity
Guild, All Rights Reserved.
Return to the Free Articles