May 4, 2015 // By Magenic
Custom solution development is inherently risky business. At its heart, we build software to solve unique business problems, something that’s never been built before. As a consultancy, our clients engage us to help them precisely because it is challenging, it is risky.
But why? Why is it that – despite our experience, our technical proficiency, our professionalism, our desire for a positive outcome – sometimes projects go sideways? There are a lot of factors that contribute to this.
- Sometimes it’s the team. On any team, the technical proficiency and experience can vary greatly. And even on a team of talented developers, the individual members may not have worked together as a group before, which means it may take a little time for the development engine to start humming.
- Sometimes it’s the business or the client. Different corporate cultures vary widely. Some will allow the standard development processes to take their course, while others are more resistant. Some embrace the development team as a true partner, while for others, trust doesn’t come as easily.
- Sometimes it’s neither. Human factors aside, the technologies we leverage are often relatively new, or haven’t commonly been used in this specific way, or are used to integrate with other systems or technologies that we aren’t familiar with.
Without a crystal ball, neither we nor the client can foresee all those things that can potentially disrupt our projects. So what can we do to ensure that we maximize our chances of getting across the finish line with a success story to tell?
There’s a PM adage that states: A little bit of risk management saves a lot of fan cleaning. (If you don’t understand that, contact me privately.) But risk management is not purely a PM activity. It’s the responsibility of each of us to sound an alarm when we spot something that could send the project into the ditch. So to that end, here’s a quick primer on Risk Management. And to help illustrate some of the topics, let’s consider these within the context of a fake “project”: going on a first date.
- Risks vs. Issues: Think of a risk as an if/then statement: If x happens (or doesn’t happen), then y will result. By its nature, this means that the course of the project hasn’t been materially impacted yet, but it could be if we don’t take action. Note that this isn’t the same as an issue, which has no if, no conditional x. Instead, Issue Management is dealing with an unforeseen z, after the project is impacted, and our only option is to react and respond as best we can.
First Date Risk #1, Budget: We’re meeting at a fancy French restaurant. If she angles for the 2010 Chateau Lynch Bages Bordeaux, then I could blow my budget for the entire month.
First Date Risk #2, Favorite Shirt: I’d really like to wear my favorite shirt. If it’s not ready at the dry cleaners, then I’ll have to wear my second favorite shirt, which really doesn’t have the same juju.
First Date Issue, Garlic Breath: Darn it! What was I thinking? I had Italian for lunch, and overdid it on the garlic bread.
- Probability vs. Impact: All risks have two factors, the probability that x will happen (somewhat subjective), and the impact to the project if y results (often more measurable). To simplify things, we often measure both probability and impact on a scale – say 1 to 5 – and then multiply the two measures together to determine an overall risk “importance” or “weight”. This ensures that our focus is on the riskiest challenges we face.
First Date Risk #1, Budget: My friend who set us up said she’s really laid back, so I think the probability of her ordering the expensive wine is pretty low (2). But the impact of blowing through my budget for the night could be bad (4).
First Date Risk #2, Favorite Shirt: I just dropped it off at the cleaners yesterday, and didn’t tell them to have it ready today. Maybe I’ll get lucky, but the probability is high (5) that it won’t be ready. My second favorite shirt isn’t terrible though, so the impact would be low (1).
First Date Issue, Garlic Breath: The probability is 100% (as is true of all issues). I definitely have garlic breath. Not sure what the impact is (yet), but let’s call it a 3 to be safe.
- Mitigation Planning vs. Contingency Planning: For any risk, we have to spend time and energy in mitigation planning – preparing to stop x from happening – and/or contingency planning – preparing to deal with y if and when it occurs. In both cases, that time and energy is better spent now than if we waited for things to take their course, and end up with an issue z that we hadn’t prepared for.
First Date Risk #1, Budget: As a Mitigation plan, I’ll order a reasonably priced bottle of wine before she has a chance. As a Contingency plan, if my budget is really blown, I can live on toast and Taco Bell bean burritos until payday.
First Date Risk #2, Favorite Shirt: As a Mitigation plan, I’ll call the cleaners now. Maybe there’s still time to put a rush order on my shirt. As a Contingency plan, my second favorite shirt will just have to do.
First Date Issue, Garlic Breath: No mitigation plans; too late for that. Contingency plans: Brush, floss, and mouthwash beforehand. Keep a pack of gum in pocket. And subtly ask if she’d be interested in a garlicky appetizer, to level the playing field.
One final comment: Identifying and dealing with risks is an art, not a science. And none of us has a monopoly on knowing the best way to handle things. So, if you smell smoke on your project, seek advice, from a manager, a mentor, or another team member. Knowing the risks and managing them is key to ensuring everyone is working in a coordinated manner toward a positive end result.
If you’d like to contact Magenic, email us or give us a call at 877-277-1044.