Managing Project Risks Part 1- Dont Be Snared by These 6 Common Traps
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When your enterprise decides to undertake a new endeavor -- whether it's
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 seems to be poorly understood by business owners and project
managers. 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.
Here's what I've 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 it's 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?
You're thinking that based on the requirements you've heard so far, this project
should take a year and a half and cost three hundred grand!)
Speaking of constraints, it's 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 it's 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 it's 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 it's 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 project's success.
4. Project requirements are typically fuzzy at the beginning.
Whether you're 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 you've cemented the requirements with everyone's 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 everyone's ability
to see clearly. Yet turning down an iffy project may be better than letting egos
rule.
What to do? As we've 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
everyone's plans. Add these together and many projects will cook up a recipe for
failure.
But it doesn't 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!
Copyright 2005 Adele Sommers
About the Author
Adele Sommers, Ph.D. is the creator of the award-winning "Straight Talk on
Boosting Business Performance" success program, and specializes in helping
people align their life passions with their business purpose. To learn more
about her tools and resources and sign up for other free tips like these, visit
her site at http://LearnShareProsper.com
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Article Published/Sorted/Amended on Scopulus 2008-06-16 21:30:29 in Business Articles
