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Handling complexity, opportunities, and threats

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If managing a project were simple, everyone would do it, right? Most projects have some degree of complexity resulting from uncertainty and ambiguity (Chapter 5 has more on defining requirements and project scope), interpersonal conflicts, or the interactions between activities and resources. Document any potential sources of complexity in your project as early as possible so you and your project team can develop a plan to prevent complexities from becoming full-fledged issues. Complexity can sneak up on you during any project phase, triggered by some change in scope, requirements, stakeholders, value, technology, or risk.

A risk is a potential event, which may or may not come to fruition, that would impact your project if it did materialize (see Chapter 10 for more on identifying and managing risk). Notice that we didn’t say the impact to your project would be negative. Many people are risk-averse because they assume all risks are negative; that is not the case with project management. When managing your project, a positive risk (an opportunity) would lead to some benefit if it came to be. Conversely, a negative risk (a threat) would result in scope creep, schedule slippage, budget overrun, failure to deliver the intended outcome, or some combination of each.

Negative risks have the potential to derail your project and, accordingly, should receive most of your attention, but don’t assume you can just ignore the positive risks! Unrecognized or unrealized positive risks can be just as detrimental to your project as unaddressed negative risks.

Let’s assume, for this example, that Elena is about to kick off a new project to renovate the kitchen of her family’s beach house (remember, projects don’t have to be work-related to benefit from project management). Their kitchen hasn’t been updated since the house was built in 1965, although the appliances had all been updated roughly ten years ago. The cabinets, flooring, countertops, and wallpaper are all dated and need to go!

Elena contacts a family friend, Erwin, the best carpenter around, to quote the cabinetry activity. Erwin provides an estimate of $20,000 for his time and the materials and two weeks to complete the project, but he won’t be able to begin the work for at least nine months with his current workload. Elena and her family want to complete the entire project in three months, so she contacts a couple of other carpenters to compare multiple quotes. The first two quotes are out of Elena’s budget, so she tentatively accepts the third quote from Joel at ABC Cabinetry for $25,000 and four weeks to complete. Joel can begin the work in three weeks. Elena must sign the contract and pay a $5,000 deposit within two weeks to secure Joel’s services.

For a project like Elena’s kitchen renovation, it might be a bit excessive to develop a formal risk register to track each project risk, but Elena is eager to complete this project on time and within budget to impress her family. She lists some negative risks, such as:

 Joel doesn’t show up on day one.

 ABC Cabinetry’s materials order is delayed, delaying the task’s start.

 Raw material prices skyrocket due to a global shortage of lumber.

 Joel’s work is of poor quality, despite the positive feedback from his references.

Elena also jots down some positive risks, including:

 Raw material prices drop due to a surplus of lumber locally.

 ABC Cabinetry sends workers with Joel to help him complete the job faster than the three weeks they quoted.

 Her first choice, Erwin, becomes available. His next client cancels their project and he can start the work in four weeks.

 Upon closer inspection, the cabinets are found to be structurally sound and only require refacing to fit the updated style of the renovated kitchen, dropping the cabinetry price by $10,000.

Countertops and flooring consume most of Elena’s focus over the next week as she works to line up contractors for those tasks. Elena’s neighbor, Lucas, agrees to paint the kitchen for $300 plus the cost of materials and a constant supply of pizza while he’s on the job.

Week 1 is behind Elena and she begins week 2 by reviewing her risk register. She alleviates some concern by confirming there is not currently any global shortage of lumber. She calls Joel at ABC Cabinetry to touch base, confirm his quoted price and start date are still valid, and let him know she’ll make her final decision in the next week. Before shifting gears back to countertops and flooring, Elena decides to follow up on the positive risk that Erwin might have an opening in his schedule. She knew it was a long shot, but it couldn’t hurt to ask.

What if we told you that Erwin’s next client did in fact cancel their project? It sounds too good to be true, and in the real world it may just be, but continue to suspend your disbelief for the sake of this example, as we are about to get to the point! Erwin’s client does cancel their project and Erwin’s schedule does open up for about four weeks. Erwin could start on Elena’s kitchen in three weeks. Elena informs Joel that she no longer needs his services before the deadline to sign the contract with ABC Cabinetry and pay the $5,000 deposit.

Had Elena not identified, documented, and followed up on the positive risk, or opportunity, that Erwin might become available, she wouldn’t have thought to call him. If she hadn’t called him, Elena would’ve had to pay $5,000 more for Joel to do the same work in twice the time as Erwin. Also, Elena can eliminate the uncertainty about the quality of Joel’s work since she knows Erwin is the best around.

Project Management For Dummies

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