Projects are always fighting against the clock – it’s all about focussing on what matters most. As a Program or Project Manager we recommend keeping two key indicators on your radar – ‘Residual Risk’ and ‘Risk Velocity’.
Lets say you’re in the middle of a software development project. Two potential risks loom – ‘code defects’ and ‘technological obsolescence’. The first, code defects, is a high-velocity risk. If bugs are found in your code, they can disrupt your project in an instant, requiring immediate attention and fixes. On the other hand, technological obsolescence, while still a significant risk, is a lower-velocity one. It indicates the possibility that the technology you’re working with may become outdated over time. While it’s crucial to address this risk, it doesn’t pose the immediate threat that code defects do. Therefore, you might find yourself frequently reviewing your code quality controls, while your strategy to mitigate technological obsolescence is addressed in longer-term planning. Balancing your focus between these two risks according to their velocity is key to effective risk management.
For complex Australian government projects, understanding and applying concepts like residual risk and risk velocity are essential, not optional. They allow you to anticipate, navigate, and lessen potential threats, and ultimately, enable an efficient and integrated risk management strategy.
- Residual risk management offers you a live snapshot of your remaining risk exposure, even after all your protective measures are in place.
- This concept helps highlight areas that might need additional control measures to tighten up your risk defences.
- By keeping an eye on these factors, your project can stay on its toes, constantly reassessing the risk landscape.
- It’s about staying flexible and adjusting your strategy as needed for the best possible defence and readiness.
- Risk velocity is all about the pace at which a risk can impact your project.
- This term considers two key elements: the time you’ve got to put controls in place, and how rapidly a risk can make a dent in your project.
- Understanding these aspects helps you to prioritise potential threats and manage them with more precision.
- A well-rounded grasp of risk velocity enables you to plan and prioritise risk management processes efficiently.
- It’s important to note that risks moving at a slower pace still need regular check-ins. Even if it seems quiet, catastrophic failure can quietly sneak up on you.
Faster risks, those with high-risk velocity, can impact your project before you know it, so they demand frequent reviews and dynamic management. Slower risks can be managed with more spaced-out reviews. That’s why it’s critical to factor in both the residual risk and the risk velocity when you’re setting up your risk review schedules. The goal is to match your review frequency with the pace of potential impact, ensuring you’re always ready and responsive, no matter how quickly risks may arise.
By understanding the relationship between residual risk and risk velocity, Australian Government Agencies can fight the fires in front of them and deal with long-term threats in a way that maximises strategic decision-making and improves the overall success rates of complex projects.
We invite you to reach out to our team for advice or an initial consultation. We’re always happy to discuss your unique challenges and explore how our expertise can assist you in streamlining your project delivery capability. With a team of professionals who bring a unique blend of strategic thinking, strong communication skills, and a commitment to excellence, we’re well-equipped to guide you on this journey. Reach out to us today to take the next step towards mastery in managing complex projects.