The People, Process, & Progress Podcast - You Have to Calculate the Risk | FF42

Episode Date: November 5, 2021

The title reflects insight from Naved Abdali and perfectly captures that we cannot consider risks if we don't take time to calculate them. In this episode I share some practical tips on how to evaluate the probability, severity and impact of risks for projects, incident response and special event planning.

Welcome to Foundations Friday, episode 42. It's not a calculated risk if you haven't calculated it. This is a quote from Navid Abdali, who is an investing and finance author of a few books, so check him out. And it's a great quote that I looked up this week as I did some risk management on some work and found a great resource from Smartsheets. So Google Smartsheets risk management or risk management matrix, risk matrix, impact analysis, all those kind of words. But Smartsheets had a great resource and I was able to use it and change it a bit and add some, you know, get nerdy with Excel and add some formulas. But the focus of this year is really to think about, you know, whether it's a project, a program, a product, a special event you're planning for, even a response. Are you, before you, a special event you're planning for, even a response,

are you, before you get into committing resources or at some point, if you've already committed and you have to kind of, let's reanalyze these risks to make decisions, how are you doing that? Are you looking at risks and whether you can prevent them completely, whether you can mitigate them or lessen the impact of them, or are you going to accept them, right? Which sometimes we need to do. And so I'm going to share a few of the kind of categories that, especially that's on the smart sheet thing that I used that I think are really good. And so when you look at a risk, you know, you want to say, is this thing, and this is kind of a different way to categorize them. Is it acceptable, right? So, okay, it's a risk, but we're good with it. Is it tolerable? Meaning it's not perfect,

but it's not going to ruin your day, ruin your go live, ruin your project. Is it undesirable? So maybe it's going to cause some unhappiness, right? It'll have some impact. Or is it just intolerable? Meaning you just, you can't do it. And kind of along the lines of those are the impact level, which kind of the traditional low, medium, high, and then there's kind of an extreme you could use where, you know, low, it's acceptable. Medium, maybe that's the lowest we're going to accept. High, you know, it's generally unacceptable. And then extreme, of course, is intolerable. We can't do that.

And another thing to think about is what's the probability that this risk is going to happen, right? And three of these were on there, these first three on this matrix. And I added the fourth one because really, again, as a review and if you and if your PM especially PMPs out there other folks that are a little more learned in project management if you realize a risk it actually can become or has become an issue right but it's still good to track those so you know the probability of the risk is it improbable so it's pretty unlikely to happen is it possible where you know it's likely to occur is it probable meaning like it's going to happen or again that, that last one, is it realized, meaning this is a risk that we are evaluating, we're looking at, we're keeping on top of, we're making contingency plans for. So that's another good

thing for project managers, leaders, planning section chiefs, whomever, is if you're going to tally the risks and you're going to share these risks and you're going to bring them up, don't go empty handed and say, here's all the problems we have. Here's all the risks we have. Also add, and here's some suggestions to either, again, prevent them or accept them or mitigate them or just know that we're going to accept this and this is parameters we're going to have to go, maybe less money, less stuff. Not everybody gets something, something like that, but it's just good to consider and a good process and a good exercise to look at for every project, whether it's early in the project, mid, late, you're having go-go later discussions, whatever.

But really look at how you risk manage in your organization and consider it. And really, how do you risk manage when you take your family on trips, right? Are we going to an area that has high crime, right? You don't have to do a whole, you know, matrix of it on a spreadsheet. But you can look at is this area safe? Is this country safe? Is there disease in this area? Do we have supplies there? You know, and when you go hiking, do I have supplies and stuff that I need when I go with my family or myself, or just me and my spouse or whatever to take care of us if we're three miles in and someone twists an ankle, you know, so do some risk management in your personal life, certainly professionally, like I mentioned with projects and programs and products and special events and responses. Consider looking at that Smart

Sheets templates. They have a few of them. They're super helpful. Stay safe out there as you manage those risks. Wash your hands to reduce the risk of spreading disease or getting it and Godspeed on your path.