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Managing Stakeholder Expectations with Risk Management Deadlines You Want It WHEN? • Laughter “The Deadline Can’T Move.” …Oops, It Just Did

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Managing Stakeholder Expectations with Risk Management Deadlines You Want It WHEN? • Laughter “The Deadline Can’T Move.” …Oops, It Just Did Managing Stakeholder Expectations with Risk Management Deadlines You want it WHEN? • Laughter “The deadline can’t move.” …Oops, it just did. • Walk away • “Of course we can do it!” • The customer is always right ? • Never turn down a sale ? • High Risk • Rely on Change Orders ? • Assume the customer will delay or fail ? Is it Ethical??? • “Maybe… Let’s investigate.” Stakeholder Sponsor Needs • An Executive’s goal is to deliver value to the organization (Projects) • May need to be aggressive (Risk) • Project Manager’s goal is to deliver SUCCESSFULLY • That requires managing expectations and risks Risk Management helps set expectations: Schedules Scope Budgets Contingency PMI ® Standards: Project Management Body of Knowledge Knowledge Process Groups Areas Initiating Planning Executing Monitoring & Controlling Closing Integration Develop Charter Develop Project Management Plan Direct and Manage Project Work Monitor and Control Project Work Close Project or Phase Perform Integrated Change Control Scope Plan Scope Management Validate Scope Collect Requirements Control Scope Define Scope Create WBS Time Plan Schedule Management Control Schedule Define Activities Sequence Activities Estimate Activity Resources Estimate Activity Durations Develop Schedule Cost Plan Cost Management Control Costs Estimate Costs Determine Budget Quality Plan Quality Management Perform Quality Assurance Control Quality Human Resource Plan Human Resource Management Acquire Project Team Develop Project Team Manage Project Team Communications Plan Communications Management Manage Communications Control Communications Risk Plan Risk Management Control Risks Identify Risks Perform Qualitative Risk Analysis Perform Quantitative Risk Analysis Plan Risk Responses Procurement Plan Procurement Management Conduct Procurements Control Procurements Close Procurements Stakeholder Identify Stakeholders Plan Stakeholder Management Manage Stakeholder Engagement Control Stakeholder Engagement Stakeholders, Communications, & Risk Project Charter Project Management Plan Plan Risk Management Identify Stakeholder Risk Stakeholders Register Management Plan Plan Identify Risks Plan Communications Stakeholder Management Risk Management Register Stakeholder Management Plan Communications Qualify Risks, Manage Management Plan Quantify Risks Stakeholder Engagement Control Stakeholders, Communications, Risk Plan Risk Responses Project Management Institute, A Guide to the Project Management Body of Knowledge Triple Constraints Scope, Schedule, or Cost Many variations; • “You can have two of the three” Scope is sometimes Performance or Quality • Influences Risk and Quality Scope Scope Cost Creep Schedule Objective Consequence Increase Scope Increase Schedule and/or Increase Cost Accelerate Schedule Reduce Scope and/or Increase Cost Decrease Cost Reduce Scope Stakeholder & Project Objectives Primary Objectives • Objective is to Build or Implement something • “Scope” objectives – What needs to be delivered • Within some constraints – Schedule, Budget Scope Cost • What is driving the project? Schedule, Budget, Scope? • Why? What if we can’t? • Start of Risk and Contingency planning… Schedule Secondary Objectives • Know the Stakeholders’ Goals and Organization’s Goals • New Horizons, Careers, Motivation or Morale • Intangibles, Hidden Agendas • May not be favorable to your project… • Project’s priority to other initiatives • Strategic Alignment Project Stakeholder Management Power-Interest Identify Stakeholders High Stakeholder • John • Stakeholder Analysis Register Keep Manage • Power, Interest, Influence, Impact Satisfied Closely • Steve • Kurt • Grids, Salience Model Power Keep Monitor • Carol Informed Plan Stakeholder Management Stakeholder LowInterest High • Engagement Level Register • Unaware, Resistant, Neutral, Supportive, Leading Plan Stakeholder Management • Communications, Changes, Issues Stakeholder Role Allocation Power Impact Interest Influence Salience Engaged Steve Sponsor 25% 2 2 1 2 Discretionary Neutral Stakeholder Register Carol Business Lead 75% 1 3 4 3 Definitive Supportive Kurt SME 5% 2 1 3 1 Demanding Resistant John Executive 0% 4 4 3 1 Dormant Unaware Project Risk Management: A practical approach What could go wrong? What are we going to do about it? Overall Project Risk Draft Schedule, Budget Qualitative Analysis Quantitative Analysis Response Planning Quantitative Analysis Identify Risks, Quantify Risk Estimate Probability Exposures & Impact Adjust Schedule, Risk Budget Scenarios Develop Initial Register Develop Risk Risk Responses Responses Review Possible Outcomes Schedule, Budget Stakeholders… Stakeholders… Baseline Schedule, Budget, & Contingency Execute… Responses Stakeholders… Stakeholders… Overall Project Risk • Initial assessment of the risk or ability to deliver • Used in Portfolio Management to help select & prioritize projects • Used in Chartering • “Typical” Risk Categories • Schedule, Resources, Budget, Complexity,… • Checklists, Taxonomy-based, Industry Standards, Tailored to the organization • Key Performance Indicator(s) for status, dashboards • x% Budget for Contingency: Management Reserve • Less relevant when planning and executing the project • Tends to ignore the REAL risks to execute the project: Individual Project Risks • PMBOK Guide is generally Individual Risks Project Risk Management: A practical approach Identify Risks Qualitative Risk Analysis • What could go wrong? • Past Projects, Past Experience • Brainstorming workshops • Checklists, Taxonomy-based, Industry Standards, Tailored to prompt Assess Probability, Impact • High/Medium/Low Probability & Impact • How likely is it to happen? • How severe will it be if it happens? Initial Risk Responses • Accept, Avoid, Transfer, Mitigate (Probability or Impact) Risk Register • Select risks to Quantify (investigate further) If possible, include Stakeholders in Workshops; If not, create the risk register “draft” and share. Qualitative Risk Analysis Project Risk Management: A practical approach Quantify Risk Exposures Quantitative Risk Analysis • For the more serious risks… • Determine Probability % • How likely is it to happen? • Estimate and Quantify impacts should it happen • Schedule (days), Budget ($), Resources (#) • Exposure • Probable Exposure is Probability x Impact; Potential Exposure is total of Impacts • Total Probable Exposure is solid basis for Contingency Schedule and Budget Risk Responses • Accept, Avoid, Transfer, Mitigate (Probability or Impact) • Mitigate: “tasks” to reduce the probability or impact to individual risks • Risk Contingency Plans, “Plan B”, and “tasks” to prepare Register • Specific “tasks” should be included in Schedule, Budget, and Baseline If possible, include Stakeholders in Workshops; If not, create the risk register “draft” and share. Quantitative Risk Analysis 14 Project Risk Management: A practical approach Estimating Observations Response Planning • Everyone estimates differently: aggressive, padded? • WBS often not detailed enough for reasonable estimates • Estimate ranges help to clarify • 3 Point Estimates: Optimistic, Most Likely, Pessimistic • Range from Optimistic to Most Likely is usually much less than Most Likely to Pessimistic • Actual duration or work performed rarely hit exact estimates • Optimistic as Best Case is unlikely (high risk) • How likely to hit Optimistic on a task? On every task in the project? • First estimate is often the most accurate • Work rarely starts on time Project Risk Management: A practical approach Estimating Response Planning • 3 Point Estimates: Best Case, Worst Case Range • Optimistic, Most Likely, Pessimistic • PERT - Program Review & Evaluation Technique • E = (O + 4M + P) / 6 • Weighted Average Probability to Estimate • Favors Most Likely; PERT estimate is usually higher than Most Likely PERT: (O + 4M + P ) / 6 (O + M + M + M + M + P) / 6 (2 + 12 + 12 + 12 + 12 + 16) / 6 Project Risk Management: A practical approach Estimating Response Planning • Use History where possible • Past Projects, Past Experience • Identification of Activities is most important • Estimating exact hours is less important than identifying all the work • Variance on thoughtful estimates is usually recoverable • Missing chunks of work directly adds to schedule • Anticipate missing work; Include contingency units of work and buffers in schedule • Involve the team • Talk to the people doing the work. What do they need to do the job? • What are the activities or steps you’ll need to do? • How long should it take with no distractions? • How much time can you spend on it per day or per week? COMMITMENT • When can you start? When should you be able to finish? • OR, S o that means you should be able to finish on xx/xx/xx, right? Project Risk Management: A practical approach Adjust Schedule, Budget Response Planning • Prepare Schedule and Budget Options, Scenarios • Include tasks needed to prepare for risk responses • Mitigations tasks – reduce Probability or Impact • Contingency Plans – prepare “Plan B” • Review 3 Point Estimates & PERT to adjust estimates • Avoid backward scheduling from deadlines • Forward schedule based on known scope, tasks, estimates, sequencing, resources, then start the discussions • Prepare Scenarios/Options to deliver Draft Schedule, • Scenarios adjusting Schedule, Scope, or Budget/Resources Budget, Scenarios/Options Schedule Scenarios Scenario 1: Full Scope, Current Staff, Target 11/30 Resolution: Delay Implementation to 1/5 ID Task Name Duration Start Finish ID Resource Name Max July 1 September 1 November
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