No Risks, No Schedule

How do risks get reflected in a development schedule?

Risks are unknowns. How does one incorporate the impact unknowns could have on a schedule if they don't know what they don't know? What "is known" is that risk or uncertainty will cause a schedule to move to the right (expand in duration), especially when it is missing from the baseline schedule.

The biggest problem we see in planning is that people fail to account for risk in their schedule. This results in an “optimistic” schedule that can only be missed. This is the norm in Silicon Valley or the "Valley of the Optimists." The lack of risk being incorporated into a schedule also hides future problems, so they are not dealt with today. When they pop up in the future they are surprises, yet were known all along but avoided. Maybe this is the residue of a culture always raising money and pitching only positive messages to future investors?

One reason risks are NOT factored into a schedule is that they tend to inflate the overall duration of the project, which no one wants to see at the beginning of the project. People want "happy" schedules that show you finishing on time. Human nature is to avoid dealing with difficult things until one has to... yet this is what causes the major delays in projects, because when you eventually deal with the risk, it is already too late.

Also, risk is a prediction of a future problem before it happens. We can always talk ourselves into believing today that the problem we think might happen in the future, actually will NOT happen. There is also a good deal of organizational ego, especially when inventing new technology that tends to discourage rational thinking about future risks as just "negative thinking" that could contaminate all the positive en energy needed to achieve a technical breakthrough. For all these reasons and more, risks rarely find their way into development schedules, based on our experience.

First you have to identify the risk in the schedule, then you must add tasks and increase duration to account for actions to mitigate the risk. Basically, risk causes a schedule to push out.

There are a number of significant known risks in most projects. These need to be reflected in the schedule today. They can be included using 1-4 steps (above). Most planning we see lean towards the “optimistic” without incorporated risks.

When risks are factored in during planning, so be prepared for the schedule to push out. This is good in the long run because it will force decisions to be made today that could mitigate future slips. Reward teams that provide this early warning and act before the fact to mitigate future failures.