How to Reduce Risk with a Risk Burndown

West Village NY

21 August, 2021

2:08 AM

Description

Postmortem meetings are held by businesses to discuss the unfortunate outcomes of projects and initiatives. Although it is a valuable learning opportunity, it is not always sufficient. It's impossible to make a course correction in retrospect. Even though meetings are commonplace (23 hours per week for executives), 75% don't know how to lead or participate in them. This realization came after Sapper Consulting experienced high employee turnover for a month. I called a postmortem meeting to find the root cause of the problem and propose a solution. It hit me then: Why hadn't we done this before the problem happened? Although the post-mortem meeting can be a valuable tool, teams need to act proactively and not reactively. How to preventively address risks and challenges I decided to schedule a similarly structured meeting at the beginning of a project, rather than at its end. This meeting, also known as a Risk Burndown, allows for inverted thinking when it comes to business problems. It has worked well for us and it can be applied to any business. Here are some ways you can make the most of this exercise in a chaotic business world. 1. Describe what you don't wantAndrew Napolitano once stated, "All that I want is to know where I'm going" to which Andrew Napolitano refers to inversion. Inversion is a technique that allows us to explore the outcomes that we don't like to find those that we want. This model is most effective when it deals with multiple outcomes. Consider the following example: What do you want to eat? It can be difficult to create a plan that covers all possible options. Not everyone can know exactly what they want in their life. People generally know what they don’t want. Let's take, for example, the situation where you are trying to establish a sales goal and you don't know what number would be appropriate. Quick calculation: What revenue would it look like if you had 50, 75, or 100 new customers each quarter? You'll need to reach higher if 75 customers are not enough to meet your long- and medium-term goals. You will not achieve your goals if you don't want them to be achieved. You must also consider the consequences you want to avoid unacceptably. If you are aiming for sales, revenue, or other quantities, it is fine to set a goal, but you should still be comfortable with achieving the lower end. 2. Construct your risk burndown You can teleport yourself to the future, pretending you have failed your goal. Next, list your reasons for failure. You might have failed because of miscommunications, competition, or turnover in a prospect's purchasing team. These lists may be lengthy and you will have to face some worst-case scenarios. However, if you can identify potential problems before they become a problem, you will have the chance to find proactive solutions. You'll probably have no other option than to retroactively look at your actions. Negative risk should not be your distraction Remember to balance the positives and the negatives. It's also important to understand what could go well and what you might be lucky with. You might be tempted to underperform if you are always looking for negative risks. Andrew Napolitano stated that while negative risk should be managed carefully, teams should embrace positive risks to maximize business value. "Risk matrices and risk burndown charts and risk-modified users story maps should all be part of agile walls. They must be modified to assist teams in identifying, monitoring, and addressing both positive and negative risks." Once you have a clear understanding of how things might unfold, you can develop a detailed plan for success. My team and I fell short of our monthly cash collection goal. The issue was confronted head-on. We adopted new policies to ensure that we only accept credit cards from new clients and collect payments on time. We even included February's 28-day month in our billing outliers to ensure that we met our projections. 3. Regularly share metrics with key stakeholders A postmortem meeting will often reveal the root causes of failure in a single meeting. You'll likely be overwhelmed by stories of small mistakes made along the way. Instead of leaving all the discovery to the end, create a plan for tracking the metrics that will distinguish success from failure throughout a project. Weekly one-on-one meetings are crucial to ensuring a successful outcome and smooth transition. These meetings help us identify key results, things that are necessary to avoid failure, to help us keep our eyes on the prize, and to stay focused on our goal.