Gaining Business Value through Proactive Risk Management
In their book Liftoff: Launching Agile Teams and Projects, authors Diana Larsen and Ainsley Niles came up with an analogy between initiating a project and launching a shuttle. An inadequate liftoff can put the shuttle on a trajectory that leads to an unknown destination. Likewise, we can condition our projects for producing business value by improving their “liftoff” through proactive risk management.
During the project liftoff, the project team can produce an agile charter as a collaborative effort. For a comprehensive overview of agile chartering, please view Diana Larsen’s video Agile Chartering: Energize Every Venture with a Great Liftoff. Putting importance on a project liftoff is a practical way to eliminate many common causes I see in stumbling projects.
Though risk management is the basis of planning in traditional project management, it is commonly replaced with the more robust agile experimental approach. In addition to experimentation, Mike Cohn introduced in this blog post the risk burn-down chart to quantify project risks. However, Mike writes that what is important is tracking the risk-trend instead of the exact quantification of risk.
Returning to our shuttle analogy, imagine the risk burn-down chart as a tool to quantify how the project deviates from the right trajectory through its journey. Think of project navigation as continuously adapting the project development in order to achieve business value.
Going beyond project risks, Robert Charette talks about organizational risks in this video presentation Fast Climbing the Risk Escalator at the Lean Software and Systems Conference 2012. Charette describes companies that are facing an ever-changing market as climbing a down-moving helix. The message is that failing to appreciate obvious risks and adapt quickly can ruin projects, much like a failed shuttle.
For another view, please see Skip Angel’s presentation during Agile 2012. Angel defines an agile organization as having “the capacity of organizations to sense and respond holistically to rapidly changing events in ways that allow them to thrive and innovate.” This capacity is built through the agile experimental model; however, understanding risk allows us to proactively adapt our project to increase business value.
To sum it all up, what if we only managed risks? In my opinion, the project can still fail because even though the risks may have been effectively managed, that’s not a guarantee that the project will be valuable to the business. With each iteration, a project team has the ability to uncover any potential value.
Should we only focus on business value instead of risks, as I see happening in many agile projects? I’d like to hear your comments below.