Risk Identification

Quick reference

• 00:04 Hi, I'm Ray Sheen.
• 00:06 Let's talk now about some techniques you can use to identify projects risk.
• 00:12 The project management body of knowledge, the PMBOK Guide,
• 00:15 defines risk identification as the process of identifying individual risks
• 00:19 as well as sources of overall risk and documenting their characteristics.
• 00:24 As we discuss this topic, I wanna emphasis the importance of identifying
• 00:28 all possible risks on your project.
• 00:31 Our next step will be the filter and prioritize those risks, but
• 00:34 right now we want to identify them.
• 00:36 So don't drop anything from your list of potential risks at this time.
• 00:40 You don't wanna eliminate an important risk too early in
• 00:43 the process by just assuming it away.
• 00:45 Let the risk analysis step tell you which ones to eliminate.
• 00:49 Some of the tools for risk identification include expert judgement,
• 00:53 documentation reviews that look for aspects of the project chartering and
• 00:57 requirements documents with gaps or
• 00:59 uncertainty, information gathering reviews with experts and experienced individuals.
• 01:04 Checklist and
• 01:04 databases that have been built based upon experience from other previous projects.
• 01:09 Assumptions testing that checks projects and business assumptions,
• 01:13 there are several diagramming techniques, and then finally,
• 01:16 a SWOT analysis strength, weaknesses, opportunities and threats.
• 01:20 Use any or all of these techniques to help you identify possible risks.
• 01:25 I'd like to go into a little bit depth about several of the techniques that I
• 01:27 found to be more helpful.
• 01:30 One of these is the information gathering interviews.
• 01:33 This could be done with internal people from similar projects or external experts.
• 01:37 When interviewing internal people, try to find individuals who've had experience on
• 01:41 projects, they'll be similar to the characteristics of your project.
• 01:45 Now when interviewing external people, search for
• 01:47 those with demonstrative best practices.
• 01:50 Be careful not to ask them to compromise confidential or proprietary information.
• 01:55 Ask them what worked well and why, and ask them what went wrong, and why.
• 01:59 The interviewee may be reluctant to discuss or admit their mistakes.
• 02:04 People don't like to talk about what they've done wrong, so
• 02:07 be gentle with them at this point.
• 02:09 Reassure them that you're just there to learn not to condemn.
• 02:12 And they typically remember a couple of the big issues on the project,
• 02:16 you may have to dig deep to identify these second and third tier risks.
• 02:20 You should also be sure to ask questions that address all three
• 02:23 sides of the project management triangle, scope, schedule, and resources or budget.
• 02:28 The next technique I'd like to discuss is assumptions testing.
• 02:32 This is a great technique to use whenever your project has high uncertainty.
• 02:36 It starts by identifying all the assumptions, hypothesis, and
• 02:39 scenarios that were used to create the initial charter documents.
• 02:43 We've discussed the W's of project initiation, what, why, when, who,
• 02:47 where, and how.
• 02:48 There are often assumptions embedded in the answers to each of these.
• 02:52 Check the validity of the assumption.
• 02:54 This often changes over time, so something that was not a risk at the beginning of
• 02:58 the project may become one, or vice versa.
• 03:01 By the way, it's okay if the assumption is wrong.
• 03:04 Just recognize it and re-plan based upon the actual assumption.
• 03:08 Don't stick with the wrong assumption just because you're afraid to change.
• 03:11 You also wanna identify which assumptions are highly sensitive.
• 03:15 What I mean by that is,
• 03:16 if changing that assumption could have a big impact on the project.
• 03:20 If there's sensitivity, that assumption is at risk.
• 03:23 No sensitivity, no risk.
• 03:25 Finally, consider the clarity of the assumption.
• 03:28 Is it accurate, stable, and consistent?
• 03:31 And is that assumption completely defined?
• 03:33 If you can't answer yes to all those questions,
• 03:35 then there's a risk in that assumption.
• 03:37 One of my favorite approaches to identifying risks is to use diagramming
• 03:41 techniques.
• 03:42 With a diagram, I can see potential threats and
• 03:44 opportunities that would otherwise be overlooked.
• 03:47 Also it's a great way for the team to explain the risk to each other.
• 03:51 The first technique is a pre-mortem.
• 03:53 You may be familiar with the term post-mortem,
• 03:56 that's what the doctors do to analyze why someone has died.
• 03:59 A pre-morterm is what we will do to time hypothesize why a project might fail.
• 04:04 I use a fishbone or Ishikawa diagram to map the potential reasons.
• 04:08 Start with major project problem that would constitute a project failure,
• 04:12 such as a major schedule delay.
• 04:14 I then brainstorm with my core team what potential issues
• 04:18 could create that condition.
• 04:20 I do the same thing for a large overrun or
• 04:22 rejection of a deliverable by the customer.
• 04:25 All of the bones that are identified are risks to be analyzed.
• 04:29 Also, I found that this is the best technique for identifying positive risks.
• 04:33 I start diagram with the result of, say, how do we finish three months early?
• 04:37 And then ask what would need to happen for that to occur?
• 04:41 The other diagramming technique is called a Swim Lane chart.
• 04:44 This maps the project activities in sequence through the primary functions or
• 04:48 departments that will do the work.
• 04:50 On large complex projects, there's often a miscommunication or
• 04:54 delay when project work is handed from one department to another.
• 04:58 Every time the project crosses a swim lane, there's a potential for
• 05:01 organizational and communication risk.
• 05:04 You use whichever risk identification technique you like and
• 05:08 that fits the culture of your organization and project.
• 05:11 The important thing is to identify all the threats and
• 05:15 opportunities to the project, so they can be analyzed and proactively managed.

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