Risk Management in the Planning Phase

00:02 When Darth Vader was a project manager for the Death Star, he did a pretty good job.

00:09 The time, scope and cost for a project such as this must have been astronomical. The vessel was a pinnacle of engineering, and Mr. Vader assumed he had thought of everything.

00:23 No way could any star ship, no matter how large, even make a dent in a superweapon that can blow up planets.

00:30 So Mr. Vader put his feet up on his favorite armchair and prepared to reap the rewards of galactic domination.

00:39 However, old Dorothy didn't assume that some tiny little x-wings could attack the planet sized Death Star and blow it up.

00:47 How wrong he was.

00:49 This goes to show that proper risk management can not only make a project more efficient by eliminating delays.

00:55 It can even save a project from total failure.

00:59 Darth Vader was perhaps a little overconfident and narrow minded by not putting a cover on the thermal exhaust port.

01:05 Or maybe he was just over budget.

01:08 For future generations.

01:09 Project managers looking to conquer the universe can avoid this problem by following this three step process.

01:16 The first step is to identify the risks.

01:20 Throughout the planning phase, the project manager will list all the risks they encounter in a risk log.

01:26 They must continually add to this through all stakeholder meetings and workshops.

01:31 Of course, it's not a straightforward process.

01:34 The information is not just sitting there with a badge saying risks.

01:39 They must use their skills, knowledge, intuition and team to uncover them. The risk log will look something like this.

01:51 Now, once the risks have been identified, the next step is to analyze them.

01:56 We can do this by reviewing two dimensions.

02:00 How bad can it get if the event happens? And how likely is it that the event actually happens? Or, in other words, the severity of the consequences and the probability of occurrence? The severity refers to the impact the event would have on the scope, budget or timeline, and to what degree the project activities are exposed to such an event.

02:24 We record the severity with a scale.

02:27 A simple one would be high, medium and low, but could be translated to something as specific as expected.

02:35 Delays or financial losses.

02:38 The probability of occurrence is how likely an event will occur again.

02:43 A simple scale of high, medium or low probability can be used, or depending on the project.

02:50 Perhaps it could be measured by percentage.

02:53 Obviously 100% would no longer make it a risk, rather something that is certain and would make it an actual issue.

03:01 Now let's fill in some potential risks with our laboratory project.

03:09 Excellent. Looking good.

03:11 But what are you going to do with this information? Project manager? See you. Next lesson where we'll look at how to handle these risks together.