Being optimistic is a wonderful thing, but being overly optimistic -- in the face of unrealistic odds -- can sabotage a project's success. Over-optimism abounds when people view every project as a "must-win" effort while failing to flag potential problems. In Part 2 of this series, we identified 10 types of risks related to choosing, estimating, and staffing your projects.

After identifying the potential risks, the next phase entails assessing to what extent the risks can negatively affect your project in areas such as cost, schedule, quality, or features. This article (Part 3 of the series) explains how you can quickly evaluate any risks you've identified to see whether they're likely to overwhelm your project.

Risks You May Have Flagged

Using the ideas in Part 2 of this article series, you and your team may have identified one or more concerns related to a project you're weighing. Ten considerations appear below; you might think of many others. If your answer to any question is "yes" -- or even "maybe" -- in relation to your project, it means that you've flagged a risk:

1) Is the project non-compelling or a bad fit for the project team?

2) Will the project scope entail operating in unfamiliar territory?

3) Are project requirements, such as product features, complex?

4) Are the requirements pitted against an aggressive schedule?

5) Are too few personnel and resources available for the project?

6) Will coordination with many different collaborators be needed?

7) Are the primary collaborators unfamiliar to the project team?

8) Are project team members discouraged from raising concerns?

9) Are there insufficient review and test cycles in the schedule?

10) Are there no standard protocols for managing scope changes?

Assessing the Risks You've Identified -- How Worrisome Are They?

Once you have a list of risks, you can next assess them to find out whether they will be mildly annoying or could wreak havoc on your project. This is a quick and simple process for evaluating them:

1a. Start by giving each risk a name or label.

Example: Imagine that your family has approached you about redecorating your kitchen because your relatives are coming for a family reunion the week after next. Your family believes that several changes are needed, as follows:

Project requirements:

* New faux paint treatment on the walls

* Resurfacing all of the kitchen cabinetry

* Laying new tile on top of the vinyl flooring

* Installing crown molding around the ceiling

Time available: Two weekends (four days) within the next 10-day period. But you don't believe that's nearly enough time to complete the job!

So, of all of the risks you've identified, you might label one of them "Too Many Features/Too Little Time." This means that the project requirements are too numerous, too complex, or both, given the time available.

1b. Next, describe the kinds of problems this risk could cause.

Also ask how likely it is to occur. For instance, if you're concerned that you won't have enough time in the schedule to incorporate everything requested, what problems might it cause whoever will be using the product, system, or solution? Are those chances fairly high? Describing these concerns can help everyone on your team agree on just how serious that potential risk is.

Example: Your relatives might arrive while the work is still in progress, and the kitchen will be unusable. Also, if you bow to the pressure to hurry, the quality of the work may be low. Both of these problems are likely if your family members try doing the work themselves, since they're not skilled in home improvements.

2. Give each identified risk a "potential impact" score or rating.

You can give each risk a High Impact, Medium Impact, Low Impact, or No Impact score, based on simple numbers you can derive easily. One way is to assign relative values to the negative impact a risk may have on the project cost, schedule, quality, and features -- with a different value possible for each of these four areas. For example, a high negative impact might be a 9, a medium impact a 5, a low impact a 1, and no impact a zero.

Example: Your kitchen redecorating project might earn scores like those below.

* Cost - You estimate that by doing the work yourselves, you'll possibly save money (if you don't botch the job). So your "Too Many Features/Too Little Time" risk might have a medium negative impact on cost, for a score of 5.

* Schedule - Since you feel backed into an almost unworkable time frame, you expect a high negative impact on schedule, for a score of 9.

* Quality - Because you expect to rush through the project, you anticipate a high negative impact on quality, for a score of 9.

* Features - Some features probably can't be completed, regardless of how fast you go. You foresee a high negative impact on features, for a score of 9.

The total score for all four areas in this example is 32, very close to the maximum. When you complete the process for any other risks you identified, you can compare this score with the others to see which risks are of greatest concern. You can then determine the priority order in which to mitigate them.

When you are finished with this phase, you'll have a set of named and assessed risks. Following this, Part 4 in the series will explain how to brainstorm ways to avoid, eliminate, work around, or otherwise mitigate each risk.

Copyright 2006 Adele Sommers

Adele Sommers, Ph.D. is the creator of the award-winning "Straight Talk on Boosting Business Performance" success program. To learn more about her tools and resources and sign up for other free tips like these, visit her site at http://LearnShareProsper.com