One of the best skills a project manager can have is the ability to tolerate and manage risk.
Risks in projects arise every day. There is a change of management on the user or IT side; a critical person quits; there are internal staff issues; a key vendor or product develops unforeseen problems; a central subroutine called by applications unexpectedly fails. How do you rebound from circumstances like these and keep a project on track?
First, let’s take a look at projects’ recent track record.
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In 2020, Standish Group reported that “66% of technology projects (based on the analysis of 50,000 projects globally) end in partial or total failure,” and that “31% of U.S. IT projects were canceled outright and the performance of 53% was so worrying that they were challenged.’
This is worrisome. It also points to the need to manage project risks, as well as tasks, on a daily basis. What common risks do project managers face, and how can they deal with them?
How to manage common project risks
Vendor issues
If you’re running a project that depends on third-party vendor software, vendor cooperation on the project is critical. Unfortunately, vendors don’t always provide the degree of support that is needed when you need it. This can delay project work.
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One way to manage vendor risk is to reroute project work into other areas that are non-vendor dependent. In this way, you can keep the project timeline intact.
If the project is so vendor-dependent that it grinds to a stop until the vendor can respond, the project manager should immediately notify upper management of the delay and why it has occurred.
One would think that this would be a natural impulse — but it sometimes isn’t. In one case, a project manager who was reticent about informing management believed he could count on the vendor to come through and ended up losing his job. It’s best to be forthright about project delays and to communicate promptly to management as well as stakeholders.
Underestimating project difficulty
When project tasks and timelines are built, the project manager relies on area team leaders in various teams to define each task and estimate it. As an initial hedge for risk, these team leaders provide range estimates with both low and high timelines. Unfortunately that doesn’t prevent unexpected delays and impasses from occurring.
To manage for these risks, project managers should plan to take the higher time estimate and add an additional 10% to that estimate for any task that presents a high degree of uncertainty. In some cases, you can’t add to estimates because there is a hard deadline that can’t be negotiated, but in many cases, you can.
Personnel risks
In very long and rigorous projects, a project manager should always be thinking about the amount of stress that is on the project team, and the possibility that a key contributor could leave or become unavailable.
One way to manage the risk of personnel loss, sickness and stress impact is to assess the bench strength of your project team before you start a project.
If your senior application developer has a capable backup who could step in, you’ve got good coverage. But if you only have one database person who can design the schemas that you need for your project data, it might be wise to have a database consultant in the wings who could be called in if you lost your database person.
Bottom line: Stay calm and collected
Especially when your project is in difficult stages and staff members are experiencing high levels of stress, you as a project manager should remain calm, cool and collected.
Staff looks to the project manager for guidance, reassurance and direction. If you remain undisturbed by stress, they will be, too. This is why leading by example is one of the best ways to manage project stress and minimize risk.