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The Project Manager’s Relationship with Risk

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In a recent LinkedIn Live session, a viewer asked, “How did you learn to embrace risk-taking?” A project manager isn’t the risk-taker in a project—risk is inherent in every project. However, it’s true that project managers must embrace risk. Project managers need to understand the risks within their projects as well as what risk management entails.  The project manager also helps the entire team understand the project risks, strategies, and risk management approaches. Here are some things project managers can do to manage project risks effectively: 

Alert stakeholders to risks. Part of the definition of a project is “to create a unique service or product.” Uniqueness means risk will be present, so project risk comes with the territory. One project manager duty is to ensure that the organization fully understands those risks. The project manager is like the “risk consciousness” for the business. For all the risks identified in a project, the project manager should alert stakeholders and ensure that everyone understands the strategies for handling the risks should they occur. 

Watch for risk triggers. Risk triggers are typically conditions that arise prior to a risk coming to fruition. Watching for them is critical, because they provide early warning to prepare for taking action on the issue. Potential risk triggers could be delays due to busy personnel; delivery delays caused by COVID restrictions, or ships being stuck in canals! When a risk trigger occurs, jump in to update and review associated risks, impacts, and response activities. That way, you’ll be ready to handle the issue when it occurs.

Create a risk management culture. Many risk plans are written and then filed away to gather dust. A project manager can ensure this NEVER happens by embracing and promoting risk management. To regularly draw focus to risks, review upcoming risks in project briefings and status meetings. This integrates risk management into your project culture.

Keep the risk plan up to date. As the project progresses, things change. Update your risk plan accordingly.  

Manage risks your sponsor considers acceptable for the project. The job of the project manager is to ensure risks are understood – not to stop project sponsors from taking them. Taking risks is part of project delivery and a significant part of staying competitive in a quickly changing marketplace. Roll with it – and report status frequently so everyone understands where your project lies relative to its risks.

For more about risk management, check out Bob McGannon’s Project Management Foundations: Risk course.

Photo by Anthony Da Cruz from Unsplash

Managing Project Contingency Funds

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Contingency funds come in handy for mitigating project risk and handling unexpected issues. How much contingency funding do you need? And how do you manage it?  Here are some tips:

Consider the cost of risk responses. After creating your risk management plan, estimate how much money you need to address the project’s high-probability risks. If the project has few risks, you might do this for medium-probability risks, too. The total cost for addressing risks is your initial estimate for contingency funding. Then, work with your sponsor to adjust and recommend contingency funding for the project based on the overall level of risk present in the project. (For example, a project might have few medium to high probability risks, but scads of low probability ones. In that case, you might add contingency to cover low probability risk that do come to fruition.)

Align contingency funds with the project business case. Organizations usually have required payback times, cost savings or profit improvement targets that must be met for a project to be approved. Calculate the impact of contingency funding on those financial targets. Ideally, the project will still satisfy business case criteria after the addition of contingency funds to the budget. However, increased costs for handling risks or other unexpected costs may mean the project doesn’t satisfy those business criteria. If the contingency funds needed jeopardize the project’s business case, revisit the project approach and costs, or reconsider whether to pursue the project. 

Determine who can release contingency funds. Before the project gets going, decide when contingency funds will be released, who authorizes them, and in what circumstances they will be released. Traditionally, the sponsor releases contingency funds. However, giving the project manager access to these funds when specific risks occur can increase efficiency and reduce the impact to the project. Document the decisions you make regarding how contingency funding will be released, so you don’t encounter roadblocks accessing the funds.

Track and return funds to contingency when possible. Keep track of the contingency funds already spent and still available in your contingency budget. If parts of your project end up costing less than planned, you might recategorize those unspent project funds to replenish your contingency budget. 

For more about contingency, check out my Project Management Foundations course.

Managing Unacceptable Project Variances

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Projects never run exactly according to plan, so project variances are inevitable. To keep your projects on track, you need to take action when variances are about to become – or already are — unacceptable. Here are some tips for managing variances.

Respond quickly. Small variances in your schedule or costs can grow large before you know it. Don’t wait for the next project report to respond. As soon as you see variances, talk to your team to find out what’s going on. Maybe the accounting department made a payment earlier than planned to score a vendor’s price incentive. Or a key team member was out sick a few days. When there isn’t a reason for the variance, focus on what’s driving that variance and monitor it closely. If necessary, recommend changes to your sponsor for getting things back on track.

Focus on scope. Thoughtful examination of project scope often uncovers opportunities for saving time and cost. Break scope down into individual requirements and analyze each one’s business value to identify candidates for reducing scope. Often, the value a requirement provides isn’t worth the cost to produce it. These requirements are easy targets to reconsider when you’re looking for ways to reduce project variances.

Scrutinize resourcing. Seeking the best resources for your project typically yields the very best results. However, “very best” might not be necessary–or wise–if those resources create unacceptable cost or schedule variances. The best resources are usually the most expensive, especially with contracted personnel. Availability issues with your top internal resources can lead to schedule slippage. One way to save time and money is to review your resourcing plan and choose people who are more available who can produce deliverables for senior team members to review. For your contracted resources, see if less expensive alternatives can be used—again with senior internal staff reviewing the deliverables they produce.

Increase reporting. Project variances capture the attention of senior stakeholders. They expect you to live up to your title of project MANAGER! Immediately inform your stakeholders of any project variances so they don’t hear about the issue from others. Increase your report frequency to keep interested stakeholders abreast of how you are addressing the variances.

For more about managing project variances, check out my Project Management Foundations course.

What qualifies as a project?

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Photo by Lala Azizli on Unsplash

During a recent LinkedIn Live session, an attendee asked “What actually qualifies as a project when summarizing project management experience? Could it be creating a lesson plan or procuring items for a charity auction?” 

According to the Project Management Book of Knowledge (PMBOK®), a project is a temporary endeavor undertaken to create a unique project, service, or result.

Let’s dig a little deeper to see what qualifies as a project.

A project:

Satisfies a set of requirements. According to PMI®, projects create a unique product, service, or result. That unique result needs to satisfy some established requirements. Without requirements, you won’t know when your endeavor is complete. Although you can launch an Agile project without fully defined requirements, you still need some high-level requirements to get started.

Requires a sequenced schedule of activities. To qualify as a project, the project goal needs a purposefully sequenced series of task. Otherwise, you’re just working on your ongoing to-do list, which doesn’t qualify as a temporary endeavor.

Considers scope, time and costs. Fundamental to qualifying for projecthood, a project must produce a result that’s at least partially defined when it starts (scope), work with a schedule of tasks (time) and work within a budget (costs.) In other words, scope defines the project result; the schedule of tasks completes the scope within a timeframe, this making the project temporary; and people and other resources (which incur costs) are needed to complete the tasks.

You could argue that only two of these elements (scope, time and cost) are required.  Occasionally, a project won’t have a prescribed deadline or budget is not a major factor. If you’ve run projects that only require management of two of these three elements, you aren’t truly an experienced project manager. 

Produces benefits. A project delivers a unique product, service, or result; and it takes time and money to do so.  To justify that time, money, and effort, the result has to produce some kind of benefit to the organization.

Given these conditions, does creating a lesson plan or procuring items for a charity auction be considered a project? Yes!

For more about project basics, check out my Project Management Foundations course.

Effective Project Management During the Pandemic

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In one of my recent LinkedIn Live broadcasts, someone asked how project management could evolve, given new and changing rules imposed by the pandemic. Here are a few key ways in which project management could adjust to be effective during the pandemic.

Focus on using tools for remote work effectively. More than ever, project management involves people working remotely, which amplifies the need for contact and useful communication tools. Those shiny new team management tools available today provide new communication and collaboration capabilities. However, without establishing new habits, those tools might be used improperly (or not at all) leading to missed or mangled messages. To ensure tools for remote work actually work, get with the team to understand the habits and approaches they use from their home office.  Then, strive to align your stakeholders around a common set of practices.

Address work circumstances in project requirements and the requirement gathering process. The pandemic adds a whole new dimension to requirements collection. Team members and clients might work in offices, at home, or both. They might work different numbers of days per week in each location. They might work different work hours because of childcare responsibilities. These circumstances are a consideration both for the requirements gathering process as well as the project requirements themselves. The idea of belonging and inclusion that is popular thinking in the talent management world needs to be applied to projects. Project requirements should address how information and interactions are transferred and how integrations between processes and tools are managed. And the requirements process should support requirement gatherers and requirement providers working in different places and on different schedules. One things for sure — counting on people sharing information over the cubical wall is a thing of the past.

Robust communication planning. Communication needs are broader and more challenging. during the pandemic. How do you ensure stakeholders feel informed when you can’t see their reactions easily? The Project Management Institute (PMI) states the person who initiates communication is responsible for ensuring it’s received and understood. That takes serious work when stakeholders are dispersed and remotely located. In a pandemic-era communication plan, center stage belongs to follow up calls, careful scrutiny of email replies, and diligent follow-up when no response is received.

Place emphasis on integration and interaction risks. Risk plans should emphasize specific risks associated with integration, interactions between staff members, and assumptions about serving clients. For example, we can’t assume transport or product delivery will be normal until the pandemic truly subsides. While things are improving in wealthier nations, virus-related impacts and restrictions could remain in other countries for some time to come.

More focus on organizational change management. Peter Senge is quoted as saying “People don’t resist change. They resist being changed.” Organizational change planning and execution needs to have greater emphasis in our pandemic-affected world. Change can be difficult because of isolation and the stressful changes people have to make. Be sure to focus on potential change fatigue and work hard to understand the magnitude of change people need to absorb. Also, consider how to provide more individual attention to stakeholders to ensure project business outcomes are realized through organizational change.

Do you have suggestions for other ways project management needs to adjust for pandemic realities? Let’s get a conversation going in the comments! The LinkedIn Learning library has some great courses about working and building relationships when working remotely. Go to the library and then search for “remote work.”

Budgeting in an Agile Environment

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Photo By Leon from Unsplash

In one of my recent LinkedIn Live broadcasts, an attendee asked about budgeting in an agile environment. Here are the steps for building and maintaining a sound budget for an agile project. 

Step 1. Determine your Minimum Viable Product (MVP). The MVP is the smallest possible product that will satisfy the most important business needs. To deliver value to your business as soon as possible, building the MVP (and nothing more) in your initial release is sensible. That way, you deliver the product faster with the smallest budget. As the MVP is used and more is understood, the business can fund development of additional functionality as needed.

Step 2. Build your estimate around people and time. With the MVP identified, the team can estimate how many people and sprints will be required to build and test those functions. This is an easy way to build an estimate. If you plan to have three developers for 12 two-week sprints, your initial estimate is the cost for 72 person-weeks (3*12*2) plus overhead costs needed in your organization.

Step 3. Adjust the number of people and sprints as you learn. Like any project, your initial estimate involves guesswork. As you build features and work through your backlog, you will probably need to adjust your budget. The team should proactively agree to when to re-evaluate the budget. After three to five sprints is a good rule of thumb. Like your original budget, the adjusted budget can be built based on the number of people and sprints, and the length of the sprints.

Step 4. Augment the budget for specific features. The priorities and needs of the business can change during your project.  In addition, discoveries or new ideas for features can surface. As a result, the business may decide to add or delete features and increase/decrease the budget accordingly. While this creates a bit of a moving feast with your project and budget, the changes are made to accommodate the needs of your product owner. 

Step 5. Keep stakeholders in the loop. Ensure your stakeholders are aware of the status of your budget. This is relatively easy with the agile approach. Whenever there are changes to the backlog (when scope is added or deleted,) you communicate those changes and the corresponding budgetary adjustment. By sharing the approved scope changes, you proactively answer any questions about why the budget has changed.

Managing your budget in an agile environment is a straightforward process as long as the agile team manages backlog features in conjunction with the product owner. Follow these steps and worrying about budget management will be a thing of the past! 

For more about agile projects, check out Doug Rose’s Agile Foundations course.

This post contains affiliate links, and I will be compensated if you click my links and make a purchase.

 

Pre-requisite Skills for Project Managers

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In a LinkedIn Live session with Bob McGannon, someone asked, “What pre-requisite skills are needed to qualify for consideration as a project manager?” While there are many valid answers, here are skills Bob and I look for in project management candidates.

  • Great communication. Project managers constantly communicate, verbally and in writing. Effective communication skills are paramount for project management.
  • Relationship building. Project management is a relationship business. Although tools and processes help a project manager, they require working with people. From team members to senior leaders, members of the public to members of the Board, project managers need to leverage positive relationships to be effective. 
  • Highly organized. Project management requires coordination among numerous tasks, people, strategic and operational objectives, finances, and communication expectations, to name a few. A project manager’s days are varied and full of challenges and queries from management. Project managers need to keep things organized to respond to the day-to-day demands of the job.
  • Keen intuition. Keeping track of everything that a project manager needs to understand can be a monumental challenge. Although tools and exception management help, having a “nose for trouble” can be invaluable. Tools don’t always expose issues early enough to identify the ideal response. Individuals who can sense issues with team members or project tasks possess an invaluable skill for project management. 
  • Juggling capability. Good project managers resemble parents who can conduct a conversation on the telephone, respond to one of their children’s needs, and make dinner at the same time. Although multi-tasking isn’t ideal for productivity, jugglers can focus their attention on multiple things and respond when needed. Given the myriad demands placed upon project managers, good juggling skills are helpful.
  • Appreciation for detail AND the big picture. Effective project managers understand the required level of detail needed to deliver their projects. They also understand how their project’s requirements and outcomes fit into the overall business. An appreciation for building (or working with others to build) everything from a detailed project task list and schedule to a high-level business case abstract is vital for success.

Have we missed something in this list? Add a comment to share the skills you feel are required for project managers and let’s get a discussion going.

For more about project skills, check out my Project Management Foundations course.

This post contains affiliate links, and I will be compensated if you click my links and make a purchase.

Dealing with Opponents to your Project

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Sometimes you must deal with someone who opposes your project. Here are tips to handle this uncomfortable and quite common situation:

Don’t ignore it. This issue isn’t going away. It’s crucial to fully understand the opposition to your project and address it. Otherwise, the opposition will intensify and become more difficult to manage. If you need help doing that, ask your sponsor for support. Keep dialogue open with your opposing stakeholder and representatives of their organization, so you can learn as much as you can to resolve their concerns.

Focus on business benefits and risks.  Project opposition often comes from misunderstandings or fear of change. Compare the opposition to your project against the benefits. Treat concerns as risks and work on mitigation strategies. Include people who both support and oppose the project as you derive risk and risk response strategies. As your project progresses, ensure your status reports provide detail to inform both project supporters and opponents. Project opponents who aren’t informed are likely to escalate their concerns with your project – so keep the status reports flowing to all interested parties.

Build a solid business case.  Ensure the business case provides a view of the benefits for the overall business. Leverage supportive stakeholders to help highlight your business case.  Items that benefit some stakeholders can create concerns for others. Ensure your sponsor is aware of any concerns so they can help counter roadblocks created by skeptical stakeholders.

Seek opportunities to support your concerned stakeholder. Understanding your stakeholder’s concerns can surface ideas for future projects that will provide benefits. Helping them build a business case for a follow-on project will help you preserve your relationship and further advance your business. It also demonstrates your ability to see the big picture in your business environment.

For more about managing stakeholders, check out my Project Management Foundations course.

This post contains affiliate links, and I will be compensated if you click my links and make a purchase.

Dealing with Pre-Determined Deadlines

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Receiving a project assignment with a pre-determined deadline happens a lot in the business world. Bob McGannon has these tips for addressing this uncomfortable situation as a project manager.

Understand the source of the deadline. Government regulations, once-a-year marketing events, and other circumstances can necessitate deadlines. The best place to start is to understand the need for the deadline and what scope flexibility may exist. The deadline may represent a manager’s internal commitment or hope. A trade show or conference is a hard deadline that can’t be adjusted.

To support fact-based conversations about the project deadline, first investigate what it will take to deliver the requested scope. As project manager, ask your sponsors to treat you like their auto mechanics. You wouldn’t take your car to the mechanic and say, “You’ll charge me $120 and have the car ready by 2pm.” You ask about the likely charges and when it can be ready. Take the same approach with assigning projects; accept management’s aspirations but ask for the opportunity to validate them to determine if they are reasonable.

Perform your duty as a project manager. It’s irresponsible to say “I’ll do it” before you determine if the triple constraints of cost, scope and time are reasonable.  Although pushing back on unreasonable constraints is difficult, it’s easier than later justifying why you missed commitments.

A sponsoring manager may not be aware of the challenges your project team will face. Sharing those challenges and the pros and cons of addressing them can help you craft achievable project objectives. Responsible project management involves putting facts on the table and conducting conversations about what can be delivered and the circumstances in which you can perform that delivery. 

Conduct the proper research. While you may have a gut feel that a project deadline is unreasonable, management decisions are rarely made without facts. Look to prior projects for timeframes and the level of effort required to produce deliverables. Track the typical time your managers require to make project-related decisions.  Determine the staff you have available. Your most talented staff members might not be available, which could mean more risks will surface and/or your project will take longer to deliver. Use that data to explain why committing to the current project deadline may be high risk. 

Be prepared to negotiate. Forecasting project completion is a bit of an art. The science develops as the project progresses and you learn more. Discuss elements that can help you meet the target deadline, such as getting the best team members, hiring skilled contractors, or cutting scope items that may be difficult to produce. Discuss milestones in the project timeline where you can re-evaluate the project completion date and be prepared to share what will be required to bring that date forward.

For more about project constraints, check out my Project Management Foundations course.

The topic for this post came from a question asked in one of my LinkedIn Live sessions. If you have a question, post it as a comment. It could become the topic for a future post.

This post contains affiliate links, and I will be compensated if you click my links and make a purchase.

Choosing Project Team Leaders

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The right team leaders can help make your project a success. Here are sound strategies for assigning team leaders to your project. 

Add strength to your project leadership. Look for people who compliment and expand your skills. Be realistic about your own skills and how others can augment them. Tell your team leaders how their strengths can support you and the project. 

Increase visibility. Team leaders with visibility to critical stakeholders can help you promote your project in addition to providing critical skills. Shrewd project managers leverage relationships between team leaders and key stakeholders to review potential project priorities and directions. Team leaders can also obtain early opinions and impressions on project deliverables as they are being produced.

Instil confidence. People who are widely trusted add value as team leaders, because the organization is likely to follow their lead regarding changes or decisions. These confidence-building team leads might act as part-time deliverable reviewers. Their reviewer role provides a valuable quality check and can also boost stakeholder confidence. 

A Reality check – team leaders are often chosen for you. Managers often assign team leaders to your project. Therefore, it is important to develop good relationships with the managers who provide resources. Use the tips provided here as rationale when negotiating to get the best people assigned to your project. If your preferred resources aren’t made available, seek to have them assigned on “stand by” for risk mitigation purposes in the event you run into project issues. 

For more about resource management, check out Chris Croft’s Managing Resources Across Project Teams course.

This post contains affiliate links, and I will be compensated if you click my links and make a purchase.