Managing
Project Risks (Part 1): Dont Be Snared by These 6 Common Traps
by Adele Sommers, Ph.D.
When your enterprise decides to undertake a new
endeavor whether its designing a new training program,
planning a new service, or revamping an existing product
this endeavor is called a project. It involves people, funding,
resources, schedules, requirements, testing, fine tuning, and deployment,
plus a host of other activities.
You may have seen this phenomenon by now: projects
are risk magnets. Why is that?
There
appear to be several factors involved. Managing project risk is
a process that often seems to be poorly understood. As a result, projects frequently experience
problems with understaffing, schedule overruns, cost overruns, and
unmet requirements.
This article (the first of a series) explains six
common traps that, when not fully recognized, can lead to unpleasant
surprises.
Heres what Ive observed over many years
as both a project leader and participant:
1. Each project
differs in some way, shape, or form from the last one.
If all your projects were exactly the same, you could
simply use a cookie-cutter approach to crank em out without
losing any sleep at night. Although projects may share some similarities,
a new project could very easily introduce several new, unfamiliar
elements that can completely throw off your sense of balance
often without your even realizing it until its too late.
2. Projects are
often constrained by finite conditions.
Initially,
you might hear limitations such as, We only have $1,200 and
three weeks to have you complete all 18 training modules for this
project. (What? Youre thinking that based
on the requirements youve heard so far, this project should
take a year and a half and cost three hundred grand!)
Speaking of constraints, its not unusual for
project sponsors or clients to ask for 1) low cost and
2) fast completion and 3) high quality and
4) many features in the final project deliverables.
Although its understandable to want the greatest
value for the money, unless the project is blessed with an infinite
schedule and an unlimited budget, tradeoffs become necessary. Usually
its only possible to achieve two or three out of
four of these goals on a typical project. The tradeoffs might
constrain the number of features, limit the quality, or both.
3. People chronically
underestimate their time and effort.
Whether
its because of a perceived social stigma or a cloudy crystal
ball, people typically have a difficult time deriving realistic
project estimates. Given the number of project unknowns, coming
up with accurate predictions can be tricky.
(Smart project
managers know this and frequently add buffers derived from records
of actual past experience, commonly known as fudge factors,
to project bids.)
To complicate
matters, people often feel pressured to further reduce the
truth that is, to minimize whatever their already low
calculations tell them it should take when they put together a bid.
Whenever management pushes people to underestimate
this way perhaps for fear of losing the project the
risks can easily overwhelm and even destroy the projects success.
4. Project requirements
are typically fuzzy at the beginning.
Whether youre talking to a client, your boss,
your colleagues, or your clients to figure out what the project
should produce, whatever they say initially may sound as clear as
a bell in some areas but very sketchy in others. Getting clarification
on the fuzzy parts might entail many conversations with many people,
and much more time than anybody ever imagined.
5. Requirements
invariably shift over time.
The minute after youve cemented the requirements
with everyones agreement, scope creep begins.
This means that the project needs may expand, shrink, or morph into
something altogether different! These situations arise because the
very act of creating something new can produce a result
(or a series of results) that may exceed or differ from what people
were capable of imagining at the start. And even when the team guards
against it, pressure to include add-ons can stretch
the scope beyond its limits.
6. Nearly everything
else about the project is dynamic!
Aside
from the requirements changing, many other things can stop, start,
or fluctuate during the project. Experienced people may leave and
new people may come on board. Budgets could get chopped. Schedules
might get slashed or sometimes even worse delayed.
Resources may evaporate or not materialize in the right forms. Politics
can sneak in and remove support, or require skipping critical steps
such as testing. The list goes on and on.
Studies of failed projects have revealed how difficult
it can be to detect all of the red flags in advance. Unbridled optimism
can block everyones ability to see clearly. Yet turning down
an iffy project may be better than letting egos rule.
As weve seen, projects can
involve several highly dynamic variables. They often operate under
tight budgets and schedules. People tend to miscalculate time, effort,
and resources. Requirements frequently expand, shrink, or change.
And shifting circumstances can pull the rug out from under everyones
plans. Add these together and many projects will cook up a recipe
for failure.
But it doesnt have to be that way. You and your
team can learn to avoid project pitfalls by paying close
attention to the cause-and-effect relationships among these six
important keys!
~~~~~~~~~~~
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.
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