How to Identify Major Risks Present In Your Project

It’s just part of the game.

How many times have you heard that phrase?

Well when it comes to the project management game, risk and risk management is more than just part of the game. It’s the part that keeps you up at night. At least it does, if you’re not doing it right. That’s why risk management is so important to project managers. And why so much time is spent identifying the potentials and their effects. And so much time is spent making plans for things that might happen — and might not.

So how do you identify major risks present in your project?

First off, let’s correct some terminology. You don’t identify major risks. You identify major risk events. Risk is another word for probability or uncertainty. Specifically, it means that the event is not a certainty. You don’t know that it won’t happen, but equally you don’t know that it won’t happen.

This uncertainty means that as a seer you are faced with a difficulty. When do you spend money to avoid or encourage what may not happen? It’s hard enough predicting what you need to do. Predicting what you might have to do and then predicting what you should do because of that, can get a little mind-bending. Especially when you realize that disruption can be positive or negative. Having a new release with all your custom enhancements is extremely disruptive to an implementation plan. Especially when it happens in the middle of your customization efforts.

In this article, I’m going to focus on the 5 major ways to identify major risk events in your project.

1. Past History

Every time you work on a project, you should be reviewing the lessons learned. This includes a list of the risks encountered. Of course, occasionally you will encounter projects that neither you nor your organization have encountered before. That’s when you need to rely on others’ experience. Google can point you to risk event lists prepared by others. Project management texts also often contain risk lists. Consultants can also be a source of risk lists.

2. Work Breakdown Review

I originally called this brainstorming. Brainstorming is a technique of generating ideas and then reviewing them afterwards. It is one of the most popular methods of identifying major risk events. However, even if you’re not using brainstorming, there is one common thread. You are starting from the work breakdown structure or list of tasks and identifying where things could occur.

3. Ishikawa Analysis

Dr. Kaoru Ishikawa was a Japanese professor and quality management innovator. He is most remembered for his fishbone diagram. Quality and Project Management use this technique to assist in cause and effect analysis. A cause and effect analysis begins by identifying the possible sources of problems and opportunities. It then progresses to identifying the possible risk events. The result is a logical list of risk events. This is unlike a work breakdown review, which begins from the tasks and uses random idea generation. Each method tends to fill in the risk events the other misses.

4. Ask around

So far, we’ve talked about formal techniques based on history or analysis. However, there is another possible source of ideas. Ask your sponsor and stakeholders. Often, people who are involved in the identification of the project can provide a different viewpoint. Both this viewpoint and the fact they often are less rigorous, can provide a unique list. This may spot major risk events not visible using analytical techniques.

5. Stumble Upon the Risks

This is also known as the “Keep Your Eyes Open” method. As we work through a project, the fog of war disappears. As a result, uncertain or risk events also appear with greater clarity. One source that no project manager can afford to ignore is the team working on the project. I’m talking about the actual producing team not the managing team. Their feedback and observations on potential risk events is critical. It must be included in every team meeting.