You’re managing a project and risks are high. How can you avoid the worst-case scenario?

As part of my normal process of defining strategy, I include a section for assumptions and key risks. For the key risks, we do an assessment of both the likelihood of it happening as well as the magnitude of the effects. This is done using both internal and external sources. For internal sources, we leverage SMEs and people that are in downstream or upstream from us. For external resources, we leverage market information but also disruptive innovations happening in adjacent markets. We also make sure that the risks are classified in terms of internal (to the organization, under our control) and external (market driven, with limited ability to influence or change).

Para evitar o pior cenário em qualquer projeto, o reconhecimento e a identificação proativa dos riscos potenciais são fundamentais. Utilizar uma combinação de técnicas como brainstorming, entrevistas, pesquisas, listas de verificação e análise SWOT é uma abordagem eficaz para reunir uma ampla gama de perspectivas e insights. Estas técnicas permitem a coleta de informações valiosas de diversas fontes, incluindo a equipe do projeto, patrocinadores, clientes e outras partes interessadas.

Prevenir será sempre o melhor remédio. Trabalhar em projetos de risco é uma tarefa de muita visão futura, onde se planeja o que fazer, no detalhe para não errar. Ter a sensibilidade dos efeitos colaterais (principalmente ações governamentais) é muito importante para tomar decisões fortes, que sustentem o projeto.

To avoid the worst-case scenario in a high-risk project, focus on: Risk Identification: Systematically identify all potential risks through methods like brainstorming and reviewing past projects to ensure no critical risk is overlooked. Risk Mitigation: Prioritize risks based on their impact and likelihood, then develop strategies to reduce their probability or lessen their impact, such as adjusting project plans or implementing safeguards. Monitoring and Control: Continuously monitor for new risks and the effectiveness of mitigation strategies. Adjust plans as necessary and maintain open communication with the project team to swiftly address any emerging issues.

Start with pinpointing risks to sidestep the worst-case scenario. Employ brainstorming, interviews, surveys, and SWOT analysis to collate insights from teams, sponsors, and clients. Factor in both internal and external influences on project scope, timeline, budget, quality, and resources. Early risk identification acts as a shield, safeguarding your project's success by preparing for potential hurdles.

As part of the strategy work, we already identified risks and made the assessment - impact, likelihood, external, internal. Based on these 4 attributes, we can identify the variables affecting each of these attributes. This next level of detail becomes the basis of understanding what variables need to be closely monitored and measured.

Após a identificação dos riscos, é crucial analisá-los para compreender sua probabilidade de ocorrência e o potencial impacto no projeto. Utilizar técnicas qualitativas, como matrizes de risco e escalas de probabilidade e impacto, ou métodos quantitativos, como modelos de pontuação e simulações, ajuda na avaliação da seriedade de cada risco. Além disso, categorizar os riscos em tipos específicos, como técnicos, operacionais, financeiros ou estratégicos, facilita a organização e a implementação de estratégias de mitigação direcionadas. Esta etapa é fundamental para priorizar os riscos e planejar ações efetivas de resposta.

The normal process that I follow when developing a strategy is to also include the key assumptions, the risks, and the mitigation plan. When I'm creating my initial strategy, I am already thinking of the risks (magnitude + likelihood) so it's at that time that I define the initial mitigation plan. The mitigation plan is the overall plan to respond if and when the risk materializes. This plan is will contain both internal actions (taken within our own organization) and external actions (taken with partners, customers, and other entities). In a way, the Mitigation plan is basically a Countermeasure plan for a problem that has yet to occur... but might occur.

Depois de analisar os riscos, escolha entre quatro estratégias principais para lidar com eles: Evitar: Mude o plano para não enfrentar o risco. Transferir: Passe o risco para outra parte, como uma seguradora. Mitigar: Reduza a chance ou o efeito do risco com ações preventivas. Aceitar: Reconheça o risco e prepare-se para suas consequências se ocorrer. Essa escolha depende do tipo e da gravidade do risco identificado.

The best approach to take when implementing the mitigation plan is to think about it as an accelerated project. You will need an action plan, KPIs, milestones, and resources to accomplish it. But because of the urgency, all the timelines will be compressed and/or the resources will be augmented.

Implementation is one of the most important aspects of risk management, particularly on high-risk or high-profile engagements. If the stakes are high enough, having a project/implementation plan for the risks and issues of the project is not going over the top. With higher risk projects, ensuring that assigning clear roles and responsibilities includes verification that stakeholders have enough time and willingness to implement risk controls, is an important first step. Updating the project schedule, risk register and budget as needed ensures risks have the best chance of being managed, and monitoring them can help enable adaptign to changes, which is also vital for success.

Like all aspects of strategy, things are dynamic and there are always going to be changes. Thus, it's important that you monitor that changes to the market, to the competition, to your customer base AND that you understand if your assumptions are changing, and if the likelihood or magnitude of your risks are changing.