Seven Habits for Highly Effective Project Risk Management

When it comes to project management, over the years, the role of the Project Manager (PM) has evolved. Every project, large or small, comes with its own set of risks. As competition for bids increases, the ability to anticipate, acknowledge and create an actionable plan to address these risks becomes one of the most important elements in a capital project proposal.

For a long time, the PM position was highly focused on just the individual’s technical expertise. This is no longer the case. With the acknowledgement that project risk management is a crucial component of any undertaking, comes the increased awareness that on-time completion and remaining within budget is more about the successful orchestration and facilitation of others, than it is about technical knowledge.

What does that mean exactly? A report on the subject entitled “The 7 Habits of Highly Effective Project Managers” breaks down the habits that today’s successful PMs must learn in order to take their capital projects to the Best in Class level.

1) Be proactive: Anticipate potential problems and put an early warning system in place. This should include a detailed project plan, good cost accounting or production reports that show historical performance and a well-prepared timeline to monitor schedule risk.

2) Forecast completion: Begin a project with the end in mind. Firms are always looking at the forecast of the cost at completion and ensuring project trends are headed in the right direction. Setting key performance indicators via a dashboard or summary report is a great way to capture a picture of a project’s status at any time.

3) Prioritize the critical path: Be able to identify key items that need immediate attention and which do not. Set milestones for issues that have come up frequently in the past, for example, complications during the closeout phase of a project. Project risk management software is an easy and effective way to do this.

4) Collaborate: Effective PMs know how to connect people to solve a problem or complete a task. Because there are so many off-the-shelf project risk management databases that provide visibility throughout the organization, there is no excuse for everyone not to be on the same page.

5) Communicate often: Know how and when to communicate in the most effective manner. If it’s through email, in person, or both, establishing frequent and consistent correspondence will prove crucial to a project’s success.

6) Be accountable: The most successful PMs are so entrenched in their projects that any problem is their problem. The onus can’t be placed on anyone but the PM if a project is unsuccessful. This accountability can be achieved more successfully when senior management is actively involved in periodic, rigorous examination of the job’s status.

7) Continuous improvement: Best in Class project leaders are constantly looking for ways to improve. Frequent analysis of how well they are doing and how they might do better is paramount to continued success.

So there you have it: seven simple habits that will aid in effective project risk management – and the keys to make or maintain Best in Class status.

Article shared from The PM Coach.

About Chris Bell:

Having collaborated with technology titans such as Geoffrey Moore, Marty Cagan, Phil Meyers, and Keith Ferrazzi, Chris brings life and energy to technology and business topics such as Enterprise Risk Management (ERM), Project Portfolio Management (PPM) and Governance Risk & Compliance (GRC). Chris is passionate about leveraging technology and is often found on the speaker circuit sharing innovative strategies to solve everyday business challenges. He is also a published author of many articles, whitepapers and books including EVM for Dummies.

Chris leads marketing strategy, brand strategy and marketing communications for Active Risk. He holds a Bachelor of Science degree from Mansfield University, and has completed graduate work at Boston University, Oklahoma State University.

Requirements Gathering in Project Management : Not Enough if not Prioritized or Ranked

This is a must read article by Gratien Gasaba on collecting project requirements, and most importantly, to keep perspective when collecting requirments. She writes for PM Hut:

“If you don’t know where you are going no road will take you there”.

To ensure that one is on the right road one needs to know where this road goes. But it serves for nothing if you don’t know where you are going. Assume you are in a bus station. You may be informed that bus number 1 will take the road to place A, bus number 2 to place B, bus number 3 to place C, etc. What criteria do you use to choose a right bus and to ensure you don’t get lost? The necessary and sufficient criterion is to know where you want to go. In the above illustrative particular case, if you want to go to the Place C, you will take the bus number 3 and exclude from your choice all other buses. In other words, if conductors of bus number 1 and bus number 2 try to convince you to take their respective buses, you will reply by a strong no, while to the conductor of the bus number 3 you will reply by an exclusive yes followed by your long strides toward the bus number3.

I have seen several project managers and project staffs complaining that the project beneficiaries are too inquisitive to the extent that it is impossible to know what they need. Complaints of this kind are warnings that the project is heading to failure. They signal a lack of focus. But who is responsible to clearly define and keep the project focus? What is the starting point towards what should be the real focus? Where and how can one gets information on what is needed to be done?
This article attempts to answer the above questions and highlight the importance of collecting requirements and actors involved in this exercise.

Collecting requirements is project manager centered

It is the project manager’s responsibility to ensure all stakeholders’ expectations are well collected and documented. After all, project managers are also required to manage stakeholders’ expectations as part of communication management. These expectations may be related to the project management or to the product of the project. When collected requirements are competing, the project manager is responsible to balance them. In fact, one of the most difficult challenges for project managers regarding scope management is to balance competing requirements and rank them by order of importance.

As project manager, do you have project requirements prioritized and ranked by order of importance? If so, congratulations! It’s a good start. If not, beware you may not be focusing the project resources to the right end!

Read full article by Gratien at PM Hut.

Leading Indicators in Project Management

There are two areas where diligence is important on Projects – (1) Planning and (2) Execution. Let’s assume that planning is done as well as possible and we are now in the midst of running the project. What I often find is that projects turn yellow just before a deadline is due when the PM realizes they won’t hit the date. This is usually less than one week away which really doesn’t give the team much wiggle room to take action and correct the problem. That is why I am a big fan of leading indicators.

The one I think works best is what I call “schedule earned value” which gauges the progress of a project against its ability to meet the commitment. In the simplest definition earned value tracks how much work is performed (earned) against how much time or resources is used (burned) to determine trending. For example, if a project has burned 50% of the time (e.g. on day 20 of a 40 day activity) but only completed 33% of the work then it is fair to assume that work is behind schedule (instead of waiting until day 35 to determine that). You can also use cost as a gauge of burn rate but this is harder sometimes to track and may not be as evenly spread as schedule.

The best way to install this rigor is to set up interim milestones against the plan and track them closely. This way as we risk interim milestones we can still track our progress against the major goals. The key is to track at a granular enough level to be able to see trends before they become issues and set up actions to correct them.

Article by Randy Wills and Kerry Wills for PM Hut.

The 5 W's of Successfully Working in a Global Project

Due to the global nature of projects, nowadays it's quite common for project managers to have project teams that include members of different nationalities and cultures.

Rather than making positive or negative conclusions about a culture, project managers need to build awareness and understand that cultures exist relative to each other. The challenge is to determine the actions that will enable them to successfully manage projects and reconcile the relative differences.

Project managers should consider the five W's to successfully work collaboratively on a global project.

Who: Who is working on the project? Everyone. It is rare to find a stakeholder or team member working on a project that has little or no contact with people from a different culture of their own.

What: What skills do project managers need to develop that will make them credible in another culture's eyes?

A project manager may be fluent in one or more foreign languages, for example. While that will help him or her communicate with others, it will not give the project manager the understanding on how a culture understands deadlines or other aspects of business. Project managers must listen and observe while working in a global setting to learn these things.

Where: Where is there opportunity to learn? Project managers should interact with people of different cultures inside and outside of the business world to navigate through unfamiliar cultures. Next time an intercultural opportunity arises, seize the moment to observe, reflect and learn.

When: When is the best time to collaborate with a multicultural team? Select an activity where all or most of your team members participate, such as a project status meeting. Does every culture respect a set meeting time, for example? In some cultures, there are no written rules of time etiquette, and a single event can be interpreted in a multitude of ways.

Why: Why should you care about multicultural traditions? As a project manager, you will have to manage teams that are partially collocated and across time zones. You should be somewhat comfortable in foreign environments and cognizant of local customs to continue learning and effectively conduct projects.

Article by by Conrado Morlan for Voices on Project Management