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Episode 412: How to Integrate Risk Management into Agile Projects (Free)

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Laszlo and Cornelius
Laszlo Retfalvi and Cornelius Fichtner

Agile has gained popularity in part due to its ability to effectively respond to issues as they arise, improve stakeholder satisfaction, and increase focus on value-driven delivery. A major challenge for many project managers is knowing how to effectively plan, identify, and manage risks when using an agile project management approach.

It's especially important to identify risk management critical success factors -- the things that make the most difference to effective risk management. This discussion addresses how to integrate proven risk management techniques with agile approaches to increase the probability of project and organizational success.

This interview with Laszlo Retfalvi (LinkedIn Profile) was recorded at the exciting Project Management Institute (PMI)® Global Conference 2017 in Chicago, Illinois.

The Practice Standard for Project Risk Management from PMI was written a few years earlier and is a useful additional reference to the topic if you haven't already had a look at it.

We look at how to develop proper project risk management statements required to support agile approaches. Risk management in project management should be considered as part of any agile approach, and this discussion also talks about how to apply proven risk management techniques.

Episode Transcript

Below are the first few pages of the transcript. The complete transcript is available to Premium subscribers only.

Podcast Introduction

Laszlo Retfalvi:   In this episode of the Project Management Podcast™, we discover proven risk management techniques which every project manager should address as part of any Agile approach.

Podcast Interview

Cornelius Fichtner:   Hello and welcome to the Project Management Podcast™ at I am Cornelius Fichtner. We are coming to you live from the exciting 2017 PMI® Global Conference in Chicago and with me right now is Laszlo Retfalvi, Good morning!

Laszlo Retfalvi:   Good morning, Cornelius. How are you? Thank you for having me here today.   

Cornelius Fichtner:   Yeah. Thank you for being here. It is very early. The congress has not even kicked off really. The first presentations are starting, I think, in a few minutes. So, you have not yet presented, right?

Laszlo Retfalvi:   No, I haven’t. I’m up this afternoon and just to point to the listeners—I’m looking around, there’s a lot of people walking around, looking at us—a lot of interest.  

Cornelius Fichtner:   [laughs]  

Laszlo Retfalvi:   This is true. I think it’s going to be a good conference.

Cornelius Fichtner:   Wonderful. That’s the one thing that I always enjoy being here. There are so many of us project managers here you can feel the energy. I’m so sorry that the people listening to this at home can’t be here and experience this. It’s always a great event.

Laszlo Retfalvi:   I agree. I agree.

Cornelius Fichtner:   Yeah. You will be talking about proven techniques to—and this is underlined and italicized—successfully integrate risk management into Agile projects. What prompted you to write about this?

Laszlo Retfalvi:   Well, that’s a very good question. So for those of you who know me in the industry, I’m passionate about risk. I think risk is an excellent tool that program managers should—all program managers—he or she should have in her toolbox as something to help them succeed. And one of the things that I found here is with the role of Agile and the Agile approach—I think we’re forgetting this whole thing about risk.

That’s of concern to me, so what I’m doing here is showing tips and techniques and some very pointed pointers based from my experience on how we can take risk management which we cannot ignore and integrate it into Agile projects where it’s actually really needed more than traditional projects. That’s really the background to the whole presentation.

Cornelius Fichtner:   You and I met for the first time, I think, one or two years ago. We sat at the same breakfast table at the last conference that we were at. You told me about your book, “The Power of Project Management Leadership”. I bought it immediately at the PMI bookstore—paid an arm and a leg for it—[laughs] 

Laszlo Retfalvi:   I’m glad you bought it. I’m glad you bought it.

Cornelius Fichtner:   That paid for your breakfast there. How did you go from “The Power of Project Management Leadership” to “Proven Techniques to Successfully Integrate Risk Management into Agile Projects”? It doesn’t seem a natural progression.

Laszlo Retfalvi:   Actually, it is if you review what really the book stands for. The book stands for components that project managers need to have in order to succeed in their profession. There are four of them and we can review that perhaps later on but one of them is having a risk-smart attitude. It’s being able to what I refer to is—it’s going to have street smarts when it comes to risk.

So, if you embrace that, you underline and you review what is required to do that, and Agile actually complement each other and that’s really how we came to here. It’s the application of knowledge from the book that applies very easily to Agile framework.

Cornelius Fichtner:   So, let’s jump into the presentation—what is the background that you started off with? What is the background challenges for risk management on an Agile project?

Laszlo Retfalvi:   Well, if you take a look at this, the nature and pace of changing today’s project is constant. As a matter of fact, if you and I go back in our lives five, ten years ago, Project Management was not as changeful as it is today. Change is just part of it. And there’s this grass root issue that –how do we deal with change? Agile—

Cornelius FIchtner:   We reject it.  Five years ago at least.

Laszlo Retfalvi:   We did. Or very formalized the path. Like if you want change, talk to me, we’ll raise a scope change

Cornelius Fichtner:   Yeah.  And you’ll have to give—increase the budget; you have to remove staff,

Laszlo Retfalvi:   And part of that still applies. Agile doesn’t replace corporate contractual framework and those types of things but with the onset of Agile, now we’re faced with “How do you execute efficiently while you bring in the principles of Agile?” So, the background to that is, a lot of people struggle with it. Even though there’s a lot of knowledge, there’s a lot of materials that’s available now in Agile, between you and I, how do we bring it into our fold into the projects that we manage in the organization that we manage and more importantly, with the leadership that we deal with and the culture that we are in? Agile is a technique but there’s so many different things that make it successful.

So that’s the challenge. The background is how do we address that and that’s really the elephant in the room is how do we do this better?

Cornelius Fichtner:   Is the fact that many of us are not using pure Agile or pure Waterfall –is using a hybrid approach—is that increasing the challenge?

Laszlo Retfalvi:   I think it is. I think it is. And the thing that. I think, confuses everything—from my position—is, what do we mean by Agile?

Cornelius Fichtner:   [laughs]

Laszlo Retfalvi:   No, no.  It’s a good question. Because when you say Agile, Agile is an overarching technique when it comes to Project Management. But the reality is, are we using Scrum? Are we using different types of techniques? This reminds me of ten, fifteen years ago when the discipline of risk was emerging.

For example, the UK had their way of doing it, the US had their way of doing it. Australia had their own way of doing it. As Canadians, we had our own way of doing it. And where I’m really pleased is it took four, five maybe ten years for industry to converge.

I think the same thing used to happen with Agile. We have a great word, we have a great way of going ahead but how do we pull all this together to help project managers execute? So we automatically think of software. Well, if you and I are in construction, how do we apply Agile? That doesn’t apply. Yet we use the word. And this is where I believe leadership and culture play a key role because those things need to be Agile in order for programs under those umbrellas to be Agile. So, that’s a problem that we have in front of us is, quite frankly, what do we mean when we say Agile?

And to me, Agile is not just applying techniques and work flows. It’s a state of mind, it’s a culture change and it’s something that can bring big benefit but if it’s not introduced properly, my experience is, you go backwards. You go backwards, you try to get caught up and as a result of that, you actually mess with deadlines as you introduce Agile. It has to be done very, very carefully.

So this is not an easy topic but I’m very pleased to be here with you in PMI this afternoon I’ll be speaking where—I’m just going to bring in my experiences in all of this and give some very good tips and techniques that people can be able to use.

Cornelius Fichtner:   OK. So, on top of that, we’re now adding risk management. Why is risk management overlooked in Agile Project Management?   

Laszlo Retfalvi:   Quite simply, people think it brings bad news.     

Cornelius Fichtner:   [laughs]

Laszlo Retfalvi:   Seriously, it always has a negative connotation. We talk about risks, therefore we’re going to get ourselves into trouble. I’m going to get in trouble with my boss. I don’t want to rock the boat, so as a result of that, we think that somehow, Agile fixes risk, replaces or somehow integrates this approach immediately and it doesn’t.

As a result of what I just said about it being bad news and you combining this with Agile where people think, “Hey, this is a new way of doing things so therefore I don’t have to worry about risk”—now you’re playing double jeopardy, right? You’re missing it the first time because of the fact that you think it’s something that we shouldn’t do. We assume that an Agile approach automatically integrates it and what happens at the end is, you totally missed it. That’s something that we have to address.

Cornelius Fichtner:   One of the slides that you have in your presentation is called Guidance and Frameworks and when I first looked at this, I’m like, “Oh my God, this is such a bad slide. Nobody will be able to read anything on this”. And then I realized what you were doing. This is a list of all the various frameworks you could be using to add risk management on to Agile. Why can’t we just use one of these—what is it—forty or something like that? Why can’t we just take one of those and add it on top of our Agile work?


Above are the first few pages of the transcript. The complete PDF transcript is available to Premium subscribers only.

PDUs: Ways of Working, PMI Global Conference, PMI Global Conference 2017

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Cornelius Fichtner
Cornelius Fichtner
Cornelius Fichtner, PMP, CSM, is the host and the author at The Project Management Podcast. He has welcomed hundreds of guests and project management experts to the podcast and has helped over 60,0000 students prepare for their PMP® Exam. He has authored dozens of articles on and PM World 360. He speaks at conferences around the world about project management, agile methodology, PMOs, and Project Business. Follow him on Twitter and connect with him on LinkedIn.

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