If you are like me, the chances are that most of your stress, the stuff that makes you lose sleep, are things that might happen, but have not yet done so. Sure, there are plenty of ideas on hand to stress us out, but uncertainty and fear of the unknown are usually at the top of the list for most people. Questions such as – ¨will my project fails altogether?”, “will I lose that key client I need?”, “will I go over budget on this project?” and so on.
The above and many other questions that go through our minds are ¨risks.” However, so are “positive” uncertainties. Since all is going well on my current project, chances (probability) are high that I will get more work from this client.” More on this later. Right now, I first want to address the “nasty negative” ones. Once you identify any risk, the best thing to do, which is also the best use of your time, is to dissect that uncertainty and give it measurable attributes. In other words, if you are worried about losing that key client, ask yourself first, what is the probability of that happening. In other words, is it a 50/50 situation, or is there only a 20% chance of that happening. Next, figure out what the impact would be on a scale of 1 to 10 or 0.1 to 1.0, etc. Look at it as a similar approach a doctor sometimes uses when they ask you: “on a scale of 1 to 10, how much does this hurt?” That gives a doctor a better understanding of how bad the situation is. So, similarly, you can determine how painful losing a client will be to you as a project manager, and as a company as well. Additionally, you need to determine how much losing this client will cost you and your employer. In other words, losing this client will mean you will lose their business, which equates to 100,000€ per year as an example.
Once you determine the probability, as well as the impact (amount of pain,) assess whether this is a real concern or if the fear is just in your head. If it is the case is the former, then determine how to address this issue now and IF and WHEN it happens.
These are known as “risk responses” and might include:
- checking the current KPIs on this client’s project(s) to determine how good or bad things are,
- speaking with the client to ensure you are meeting his/her expectations,
- asking help from the sponsor as a client manager to figure out a plan to keep this client, and so on.
In other words, by “qualifying (how bad)” and “quantifying (how much it will cost you in $ and €),” it helps you define how bad this risk is and how much monitoring it requires.
Now, back to the “positive risks.” I always tell my clients that, in addition to identifying ¨negative risks,” they should also identify the positive ones. They are still there, and this process psychologically helps people not merely to focus on what can go wrong on a project. So, going back to the same example regarding “losing a key client,” a “positive risk” associated with this situation might be that after losing this client, their competition might give you a shot at their project work or, if you not only satisfy the current client’s expectations through your “risk responses,” your relationship might strengthen, which might lead to additional work in the future. Mind you, this is all made up, and life/work is not always that pragmatic. Still, it gives you an idea that what you need to do, as a project manager, is to meet your fears (uncertainties) head-on and demystify them by analyzing them clinically and impartially. This is not to say that you will eliminate all your risks, as well as the stress associated with them, but rather that you will be well-prepared should these risks materialize!