Risk Identification

Quick reference

• 00:00 Hi, I'm Ray Sheen.
• 00:00 Let's talk now about some techniques you
• 00:05 can use to identify project risks.
• 00:10 >> The Project Management Body of Knowledge, The PMBOK Guide,
• 00:13 defines risk identification as the process of identifying individual risks as well
• 00:18 as sources of overall risk and documenting their characteristics.
• 00:22 As we discuss this topic, I want to emphasize the importance of identifying
• 00:27 all possible risks on your project.
• 00:30 Our next step will be to filter and prioritize risks, but
• 00:33 right now we want to identify them.
• 00:35 So don't drop anything from your list of potential risks at this time.
• 00:39 You don't want to eliminate an important risk too early in the process by just
• 00:44 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 uncertainty, information gathering reviews
• 01:02 with experts and experienced individuals, checklists and databases that have been
• 01:07 built upon experience from previous projects, assumptions testing that check
• 01:11 both project and business assumptions, several diagramming techniques.
• 01:16 And finally a SWOT analysis, strengths, weaknesses, opportunities, and threats.
• 01:22 Use any or all of these techniques to help you identify possible risks.
• 01:26 I would like to go into just a little more detail with several of the techniques that
• 01:30 I've found to be most helpful on projects.
• 01:32 One of these is using the information gathering interviews.
• 01:37 This can be done with internal people from similar projects or external experts.
• 01:42 When interviewing internal people try to find the individuals who have had
• 01:46 experience on projects that will be very similar to the characteristics of your
• 01:50 project.
• 01:51 When interviewing external people search for
• 01:53 those with demonstrated best practices.
• 01:56 Be careful not to ask them to compromise confidential or proprietary information.
• 02:01 Ask them what worked well and why and also ask them what went wrong and why.
• 02:07 The interviewee may be reluctant to discuss or admit their mistakes.
• 02:11 People don't like to talk about things that they've done wrong.
• 02:14 So be gentle with them at this point.
• 02:16 Reassure them that you're there to learn, not condemn.
• 02:20 Also, they typically remember a couple of the big issues on the project.
• 02:25 You may have to dig deep to identify the second and third tier risks.
• 02:29 You should also be sure to ask questions that address all three sides of
• 02:34 the project management triangle, scope, schedule, and resource or budget risks.
• 02:40 The next technique I would like to address is assumptions testing.
• 02:44 This is a great technique to use when your project has high uncertainty.
• 02:49 It starts by identifying all assumptions, hypotheses, and
• 02:52 scenarios that were used to create the initial charter documents.
• 02:56 We've discussed the W's of project initiation, what, why, when, who,
• 03:01 where, and how.
• 03:02 There are often assumptions embedded in the answers to each of those.
• 03:06 Check the validity of the assumption, this often changes over time.
• 03:10 So something that was not a risk at the beginning of the project may
• 03:14 have become one or vice versa.
• 03:16 By the way, it's okay if the assumption is wrong.
• 03:19 Just recognize it and replan the project based upon the actual assumption.
• 03:24 Don't stick with the wrong assumption just because you're afraid to change.
• 03:28 You also want to identify which assumptions are highly sensitive.
• 03:31 What I mean by that is if changing the assumption could have a big
• 03:35 impact on the project.
• 03:36 If there is sensitivity that assumption is a risk.
• 03:39 No sensitivity, well, then no risk.
• 03:42 Finally, consider the clarity of the assumption.
• 03:45 Is it accurate stable and consistent and is the assumption completely defined?
• 03:49 If you can't answer yes to all of those, then there is risk in that assumption.
• 03:54 One of my favorite approaches to identifying risk is to use diagramming
• 03:58 techniques.
• 03:59 With the diagram I can see potential threats and
• 04:02 opportunities that would otherwise be overlooked.
• 04:05 Also, it's a great way for the team to explain the risks to others.
• 04:09 The first technique I use is a pre-mortem.
• 04:12 You may be familiar with the term post-mortem.
• 04:14 This is what doctors do to analyze why someone has died.
• 04:18 A pre-mortem is what we will do to hypothesize why the project might fail.
• 04:24 We use the fishbone, or Ishikawa diagram, to map the potential reasons.
• 04:28 I start with a major project problem that would constitute a project failure,
• 04:33 such as a major schedule delay.
• 04:34 I then brainstorm with my core team what potential issues could create
• 04:39 the condition.
• 04:40 I do the same thing for a large overrun or
• 04:42 the rejection of a deliverable by the customer.
• 04:45 All of the bones that are identified are risks to be analyzed.
• 04:49 Also, I found that this is the best technique for identifying positive risks.
• 04:54 I start a diagram with the result of finish three months early and
• 04:58 then ask what would need to happen for that to occur.
• 05:02 The other diagramming technique I found useful is called a Swim Lane chart.
• 05:07 This maps the project activities and
• 05:09 sequence throughout the primary functions or departments that will do the work.
• 05:13 On large complex projects there's often a miscommunication or
• 05:17 delay when project work is handed from one department to another.
• 05:21 Every time the project crosses a swim lane there's a potential organizational and
• 05:26 communication risk.
• 05:27 >> Use whichever risk identification technique you like and
• 05:32 that fits the culture of your organization and project.
• 05:36 The important thing is to identify all the threats and
• 05:41 opportunities to the project so they can be analyzed and proactively managed.

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