As project managers, we must understand how to identify risk and how to put strategies in place to mitigate their effects. To put an effective strategy in place, it is necessary to consider what factors are leading to the risk and when these factors are most likely to impact your project. Over the next few posts we’ll talk about three common categories of risk, how we distinguish them from each other, and what we can do to make sure they don’t negatively impact our project.
Do we have reason to believe the features we’ve scheduled for the upcoming release will deliver the value we have planned? Do we have reason to believe the team can deliver that value within the time and cost constraints we have established? What about our customers, have they weighed in that we are building the right product? Is everyone on the team organized around a clearly articulated product vision? Answering these kinds of questions is what it means to mitigate business risk.
Business risk deals with value. In other words, can our project deliver the value we have promised to the business?
Business risk is one of the first kinds of risk to consider on a project. This is often addressed before the entire team really gets going on the project. In this stage, you are setting goals, chartering the project, and getting the project funded. Once the vision is set, make sure that the features you define in the product backlog are focused on delivering that vision. Weed out requirements that are not necessary to deliver that vision, keep things as simple as possible.
Establish a high level architectural approach for the product and use this common understanding as a baseline for estimating and planning. Estimate your backlog, keep it prioritized, and work on the highest value features first. Measure the throughput of the team and assess progress against your backlog. If your team’s throughput is less than expected, deal with these issues immediately. Give your product owners the opportunity to adjust the scope of the release or negotiate detailed feature functionality.
Constantly reevaluate the product backlog in light of what we are learning from the emerging solution. Don’t assume that the original features are the right features to deliver the vision. Stay open to new information and be willing to learn. If you find that what you are learning is moving you away from the original product vision, ask the hard questions about the project and help the business decide if this new direction is consistent with the organizations goals. If not, what does this mean for the product?
Dealing with business risk involves balancing the product vision, market needs, and the emerging solution. Maintaining the right balance between these three factors is how we guide the project into a successful outcome.
Next post… Technical Risk