How does one provide for a competitive schedule that exploits opportunities and protects against obvious risks? The opportunity and risk objectives are twofold:
- Take advantage of opportunities and provide protection from risks
- Implement reasonable actions to maintain your competitive edge
These two objectives compete against one another, and, therefore must be balanced. And opportunity and risk strategies come with a cost. But a proper focus on four main mechanisms provides an open window where project managers can implement effective strategies at a limited cost. This makes for a more resilient schedule; a schedule that is more flexible to uncertainties.
This article briefly introduces four mechanisms to help reach opportunity and risk objectives, which are a competitive schedule favored by opportunities and guarded against risks.
Your project must have a clearly defined purpose. Failure to provide detailed objectives makes the project susceptible to losing focus during the process of identifying and responding to opportunities and risks. A clear project purpose supported by detailed objectives definitely makes the project more resilient.
Early Identification and Action
Scan the opportunity and risk horizon to identify opportunities and risks early on and to respond in good time. There are four primary opportunity and risk ways to respond:
- Enhance opportunity and reduce risk
- Transfer or share
Your first action is to avoid as many risks as possible or transfer them to third parties. If risks remain then implement mitigation efforts for the remaining risks. On the other hand you want to enhance present opportunities. You may have to accept the risk, but set aside cost and schedule contingencies to deal with actualized unknown-unknowns or risks that have not been identified. The sooner the identification and action the more tools at your disposal, which makes for more resilience.
Spread the Knowledge
You will want to share your identified opportunities and risks with the entire project team. Elicit input from the team to confirm that the team’s cumulative experience is considered to the benefit of the project. Improve communication related to opportunities and risks.
Warn against unilateral actions taken by team members that could have a negative effect. Finally, distribute actions to appropriate team members and monitor their implementation. Sharing your knowledge and monitoring actions make the project more responsive.
Set aside schedule and cost reserves. The caveat for management reserves is they must be reasonable. You wouldn’t want your competiveness compromised by excessive reserves that weigh negatively on your proposal. Maintain reserves at the project level and not individual levels, otherwise, it becomes similar to activity estimate padding, which is not an accepted practice.
Padding is the overly conservative addition of time and/or cost to activities to increase the promise of successful project execution. Padding is less transparent than a management reserve. And schedule resilience is enhanced by management reserves.
It is possible to increase the likelihood of a competitive, opportunity enhanced, and risk adjusted schedule.
- First, make sure to clarify the project purpose to improve focus
- Second, identify opportunities and risks early on to encourage and support timely action
- Third, consider your project team’s opportunity and risk experience to the project’s advantage
- Fourth, include transparent management reserves
These four mechanisms make the schedule more flexible, and better able to meet objectives.