Seeing Is Believing
As the project manager begins to develop the project plan, which includes breaking down the project deliverables into their smallest components, understanding all resources that are required, estimating costs, and scheduling, she begins to see where potential problems may occur that could have impact on the project. The most important tool a project manager could have in managing projects is seeing problems ahead of time and being prepared with responses. When the project manager can see areas of potential problems and can plan for these problems, she becomes a believer that risk can be managed if planned for correctly.
Risk and Procurement—Planned?
Most project managers will agree that certain responses that were planned ahead of time saved or protected not only a project activity, but also the schedule or perhaps even the project’s budget. Planning for risks allows for the project manager and staff to have a response ready in case a problem occurs. This can mean the difference between having the time to design the best response possible versus having no time and making knee-jerk reactions that will simply put a Band-Aid on the problem and generally be a more expensive solution. Project managers, in planning for risk with well-designed responses, can actually be one of the project’s biggest assets in protecting not only the project but also the organization from problems that could be anywhere from minor to having a catastrophic impact.
Save the Project and Organization
A project manager has a responsibility to ensure the completion of all work activities that produce the project deliverable, which in turn meets the expectations of the project objective. He also has the authority to plan and manage all of the work activities, as well as the responsibility to plan for and manage risk throughout the project lifecycle. If the project manager is seen as the individual who ensures the outcome of the project deliverable, he can also be seen as the individual who might ultimately save the project from its own problems through risk management.
In some cases the project manager has not only saved the project budget, schedule, and quality of the deliverable, but has protected the organization from legal action that might have been a possibility through certain contract agreements but was managed in a risk response. Project managers and purchasing agents within the procurement department know that the use of contracts and how they are negotiated can be used as a risk management tool—and can accordingly mitigate or eliminate risks associated with a bigger picture regarding the entire organization in regard to potential legal actions.
Proactive Versus Reactive
As we’ve stated, one of the most powerful tools the project manager can have is visibility of all potential risks and a best-case-scenario risk response planned for each of them ahead of time. Unfortunately, as projects are developed, project managers can find themselves very busy, and identifying and planning risk responses will either be a lesser priority or will not be completed at all. This is unfortunate, as we can see in Figure I.1. Failing to plan for risks can ultimately have an impact on the project deliverable, budget, and schedule.
Figure I.1 Impact to Project with and without Risk Planning
When project managers are trying to manage work activities, issues arise on a regular basis that he must deal with. Some are minor, simply just making the decision of one thing over another, while in other cases a problem has actually occurred and needs a response and corrective action. When the project manager has no time to think of a best-case scenario response, “reacting” to a problem indicates the problem has already occurred and the project manager is simply performing damage control.
Project managers discipline themselves to allocate time before a project starts to identify potential problems, predict the probability of occurrence, analyze potential impact to the project, and use resources available to identify best case scenario responses. This is an example of working in a “proactive” response mode. When project managers are proactive in response planning, they have a roadmap of potential problems and are almost waiting for them to occur. From this position, in some cases the project manager and project staff can actually make alterations to a work activity prior to a potential risk to simply eliminate it. Being proactive in risk identification and response planning gives the project manager confidence throughout the project lifecycle that they can not only see problems before they happen, but they have an opportunity to eliminate them, or, at worst, have a response for a best-case scenario outcome that is in the best interest of the project in the organization.
Problem Management Versus Change Management
Although project managers do the best they can in identifying potential “problems” that may occur throughout the project lifecycle, the one uncertainty project managers cannot plan for are any changes that will be required throughout the project lifecycle. As we have seen, when the project manager operates in a proactive mode, it is because she has developed a process that outlines steps to take in certain scenarios. As we have seen, developing a risk management plan is a process the project manager can follow to consistently deal with potential problems. Another process the project manager can use is to address changes required throughout the project lifecycle.
Some project managers view change as a problem—and therefore a risk—that should be mitigated or eliminated. A customer might make a request to alter something on the project deliverable before it is completed so it will meet newly discovered conditions. As much as we would love to have the customer understand “all” specifications required for their deliverable at the beginning of a project, in some situations the customer may be working within a developing environment, and alterations to the deliverable might have to be made in order for it to work correctly in what the customer is developing. In this case, allowing for a project deliverable to be changed on the fly would be seen as good customer service.
In other cases, items that are procured might have to be altered slightly depending on availability or work required by an externally subcontracted resource. These types of changes are also inevitable but should be seen as opportunities to perfect what the project is trying to accomplish, rather than as an obstacle. Like any other aspect of the project, the project manager should develop a change management process to ensure changes are conducted correctly and efficiently and are implemented with minimal impact to the project. A detailed change management process is introduced later in this book. Project managers can use this powerful tool to control how change is managed on projects.