risk in a collaborative culture

 Why risk matters  Profiling risk  Mitigating risk  Communicating and owning mitigation

why risk matters

what is risk?

What Drives Risk?

Project Management Change Management how does risk change during a project?

what happens if we ignore risks? I’m beginning to think it wasn’t such a good idea to turn off those unit tests

what happens if we incorrectly define risks?

At What Levels Should We Assess Risk?

How Is Risk Management Different From Change Management?

profiling risk

There are many models... most work well. How about:  Delivery failure  Business case failure  Collateral damage

delivery failure Standish Group Study, reported by CEO Jim Johnson, CIO.com, ‘How to Spot a Failing Project’

Always or Often Used: 20% Never or Rarely Used: 64% Standish Group Study, reported by CEO Jim Johnson, XP2002 Sometimes 16% Rarely 19% Never 45% Often 13% Always 7% business case failure

collateral damage

example…

Express Products Refactor existing enterprise software products for the SMB market. The goal: make these products consumable by the SMB market.

Risks What are the risks of delivery failure? What are the risks of business case failure? What are the collateral damage risks?

Considerations Business Case Risk: High. Why? – IBM Sales teams for these products were not experienced in reaching customers in this market – Required new sales channels (telesales, business partners etc) – Required new support structures (IBM L1/L2/L3 and support methods were accustomed to enterprise customers) – Marketing material needed targeting at this market

Considerations Delivery Risk: Low

Considerations Collateral Damage Risk: Potentially high. Why? – Are there existing enterprise customers that will want to migrate to the SMB versions?

exercise…

Stack Product 10 or so discrete products with concurrent availability Geographically dispersed teams (China, India, Egypt, Germany, UK, many US locations, Canada)

Stack Product Dependencies: – within the product set – on other SWG products (eg WAS) – Third party dependencies (Oracle, Sybase, operating systems)

Stack Product Typically major re-engineering in each release (new WAS version, new technologies, new common components etc) Problem diagnosis difficult

Stack Product Announcement before development complete Services needed to speed market adoption Sales team need to be educated in new features and how to sell the stack Market expectations high at launch

How Would You Profile The Risks? In delivery? In business case? Collateral damage?

back to the models

Complexity and Uncertainty As we profile risks, how much risk is driven by some combination of complexity and uncertainty?

uncertainty market uncertainty technical uncertainty project duration dependents

complexity team size mission criticality team location team capacity domain knowledge gaps dependencies

Complexity Uncertainty  Simple, young projects  Need agility  Tight Teams  Complex, mature market  Need defined interfaces  Agility to handle uncertainty  Process definition to cope with complexity  Laissez faire Low High  Well behaved Complexity and Uncertainty

a model for profiling risk

Delivery Failure – What is the cost of delay and the impact of uncertainty associated with schedule? – What is the impact of cost overrun, and the uncertainty associated with cost?

Business Case Failure – What is the magnitude of the uncertainty in benefits, specifically relating to product features? – What is the magnitude of the uncertainty in benefits specifically relating to uncertainty outside our control, e.g. general market uncertainty?

Collateral Damage – Is there risk of collateral damage (risk to existing business, etc.)?

How Do We Answer These Questions To Profile Risks?

Leading Agile Collaboration Model Collaboration Process collaboratively

open environment right people foster innovation step back

bring the right people together from the entire enterprise customers marketing sales product management finance development support

bring the right people together from the entire enterprise in other words, the affected and affectors!

Trustworthiness stimulate creativity through collaboration process

and let them work

agree to goals and objectives

brainstorm

group in silence

prioritize based on business value

exercise…pick a project

Using the Risk Profiling Model, what is your risk profile?

What are specific areas of uncertainty and complexity?

Whose input is important to create an accurate, project-level profile of the risk?

Delivery Failure – What is the cost of delay and the impact of uncertainty associated with schedule? – What is the impact of cost overrun, and the uncertainty associated with cost?

Business Case Failure – What is the magnitude of the uncertainty in benefits, specifically relating to product features? – What is the magnitude of the uncertainty in benefits specifically relating to uncertainty outside our control, e.g. general market uncertainty?

Collateral Damage – Is there risk of collateral damage (risk to existing business, etc.)?

Leadership Role profiling your risk

What is the best way to identify, evaluate, mitigate, monitor risk including risks in aggregate (rather than just component risks)?

In what areas can you tolerate risks?

At a high level, how would you rank the risks?

At a high level, what risk strategies (Avoid/Ignore/Contain/Contingency/Transfer) make sense?

mitigating risks

Complexity Uncertainty  Simple, young projects  Need agility  Tight Teams  Complex, mature market  Need defined interfaces  Agility to handle uncertainty  Process definition to cope with complexity  Laissez faire Low High  Well behaved Mitigating Complexity and Uncertainty

mitigating complexity

Market Differentiating High Low Mission Critical Low High Differentiate Parity Partner? Who cares? Purpose Based Alignment Model

Market Differentiating High Low Mission Critical Low High Innovate, Create Do we take this on? Minimize or Eliminate Achieve and Maintain Parity, Mimic, Simplify Purpose Based Alignment Model

exercise… for your project

Exercise: Mitigating Complexity Risk For your project, use the Purpose Alignment Model to identify ways to mitigate complexity risks.

mitigating uncertainty

Purpose Considerations Costs and Benefits Business Value Model

The Business Value Model and Uncertainty This models iterative decisions.

exercise… for your project

use the Business Value Model to identify ways to deliver value and mitigate uncertainty risks.

exercise… your risk mitigation plan

What are the specific, prioritized ways you will change your project’s risk profile?

What is the value of making these changes?

our dynamic world

what happens if…

We need to accelerate the timeline?

The demand for the product shrinks?

We fold-in an acquisition?

A part of the team is pulled away?

team affects

What happens to our team’s risks?

what are the ripple effects on the broader team?

communicating and owning mitigation

We have profiled risk and developed risk mitigation plans.

How do we now execute our plans?

How do we communicate the risks and the mitigation plan so that it is owned?

Scenario In order to respond to a competitor, Product Management announces an early release. In order to meet the release date, Development shrinks the time allocated to the quality plan. The product releases but Support is not prepared for the required support levels. Support shifts some support tasks to Development. Development no longer has the resources to meet the next planned release date.

One Option A clearly defined framework that we share among the team and across team and organizational boundaries. We call this the “Macro-Leadership Cube”

macro leadership and risk

Macro Leadership Cube

Shared Boundaries Interlock

exercise… for your project

look at your risk profile and mitigation plan...

What risks and mitigation plan activities need to be communicated to and owned by the broader team?

How can you maintain the interlock as things change?

Add these activities to your risk mitigation plan.

Leadership Role Ok, now what?

Over time, we want to learn from our experience …

… and improve our ability to profile and mitigate risk

Consider the Conscious Competence Learning Model

Conscious Competence Learning Model

Level 1: Unconscious Incompetence We don’t know that we don’t know.

Level 2: Conscious Incompetence We know that we don’t know and start to learn.

Level 3: Conscious Competence We know that we know and are highly skilled.

Level 4: Unconscious Competence We don’t know that we know. We are so skilled that it does not require conscious effort.

exercise…

How can we specifically apply this model as we refine our risk mitigation with the broader team?

summary

 Why risk matters  Profiling risk  Mitigating risk  Communicating and owning mitigation

There are many models... most work well. How about:  Delivery failure  Business case failure  Collateral damage

Complexity Uncertainty  Simple, young projects  Need agility  Tight Teams  Complex, mature market  Need defined interfaces  Agility to handle uncertainty  Process definition to cope with complexity  Laissez faire Low High  Well behaved Mitigating Complexity and Uncertainty

mitigating complexity

Market Differentiating High Low Mission Critical Low High Differentiate Parity Partner? Who cares? Purpose Based Alignment Model

mitigating uncertainty

Purpose Considerations Costs and Benefits Business Value Model

communicating and owning risk