PMI CAPM – Blitz Review of the CAPM Course Part 6

11. Communicate With Stakeholders

Let’s talk about communication. So much of communication is project management or scratch that, reverse it so much. Project management is communication. The planning we’re answering, who needs what information? Who is authorized to see that information? Who will provide it? When is the information needed? What modality or format? Where will you store this information?

And what about time zones or language differences and so on? Also in the communications management plan, what are the requirements from stakeholders? What are they expecting? What exactly will we communicate and why? What’s our cadence or frequency? Who will provide the information? And what about that confidential information? Who’s going to release it? So all of that’s defined in the communications management plan.

Our communications channel formula. Remember this n times N minus one divided by two. All right? It’s a great little formula. You’ll probably see this. Pay attention to, though. How many more communication channels will you have? You have to solve for current, then solve for future and then find the difference of the two amounts of stakeholders to create new communication channels. So this week you have ten, next week you have 15. Solve for ten, then solve for 15, then find the difference. You can’t do just five. Remember the communication model. I’m going to send you an old fashioned fax.

So I’m the sender. My fax machine is the encoder. We have the telephone lines, the medium. Your fax machine is the decoder. You are the receiver. If we’re having a conversation and there’s some static on the phone, we have noise. If I’m sending you a fax and your fax machine is unplugged, we have a barrier and some fax machines will send back a confirmation or an Acknowledgment. Feedback and response can also be a form of an acknowledgement.

You and I are having a conversation and you’re shaking your head in agreement with me, so you’re giving me some feedback or response. It’s a dialogue. So we’re talking to one another, controlling communications. Ten three in the pinbox, right information to the right people at the right time. And then we have to enforce the communications plan and ensure that information is flowing among the parties. Key point there really that communication is not just from the PM, it’s among everyone. That’s our communication channels, that everyone can talk to everyone.

Where are we going to keep this? How are we going to retrieve information? Use expert judgment to help me control or to plan or really just about for anything. And remember meetings, that meetings need a time limit and agenda. Usually someone’s going to keep minutes and we have to make sure that everyone is involved. So facilitate great quick review of communication. Very important for your exam. I hit the headlines here and let’s keep moving forward.

12. Manage Project Risks

Now let’s talk about project risk in our blitz here we began our conversation and talk about the risk management plan that we’re going to plan for risk events. Remember, we talked about the risk appetite. How hungry are you to take on risk, how tolerant are you? You based on the project priority in relation to the cost of risk elimination. Low priority, probably not going to spend a whole lot to eliminate risk. A high priority project though, we’re more willing to spend money. So that’s tied to our risk threshold, our stakeholder tolerance and the utility function just with a threshold. Remember, this idea of a threshold is that you’re going to cross over some point and now we have a warning sign or condition.

Sometimes we see the idea of a trigger that you go over the threshold, you do the trigger and that means you are going to do your pre planned risk response. Creating the Risk Management Plan this is where we did our risk probability and impact matrix. We examined and documented our stakeholder tolerances, nailed down our reporting formats and tracking that we define. How will we track risk through the project, our risk categories. This was the opportunity to create a risk breakdown structure, typically in technical quality or performance.

And we had that special category, project Management risk. You could also include risk and external risk events, things that are just external, like you’re waiting on a vendor or there’s a pending law or the weather. From here, after identifying risk, we go into analysis and remember the two flavors that we have, qualitative and quantitative. Qualitative. Qualifies the risk for more analysis. So this was a probability impact matrix.

So remember, we’re using an Ordinal scale, high, medium, low or rag rating, red, amber, green. We could do a cardinal scale, which is like one to 100. You multiply probability times impact and you get a subjective score. This is very fast, very unreliable. It’s just a quick way to judge probability impact and if the risk should go on to our next process, quantitative analysis. Quantitative analysis is the real study that we’re really looking at the risk event and that’s helping us find our risk exposure based on probability and impact. From that we can create a contingency reserve, an amount of money set aside just for risk events.

And this helps us to see how realistic are we on hitting time, cost or scope the probability impact matrix. Because a cardinal scale our risk exposure, remember, the sum of our contingency reserves, the sum of our expected monetary value will give us our contingency reserve. So probability times impact probably have to do this on your exam where the last column is blank. So you just multiply probability times impact and then you’re going to add them up. Be alert, look out for risks that have a positive impact that goes towards our expected monetary value.

In this chapter, we also saw our seven risk responses so we’re going to look at planning risk responses. Our goal is to enhance opportunities, reduce risk events and then document those. And of course, we will track our outcomes here. Responding to negative, there were three avoidance, transference, mitigation, avoidance, you change your plan, you avoid it. Transference, you hire a vendor and you want the vendor to resolve the problem or own the problem. It’s a contractual relationship. And mitigation, anything that you do to bring down the odds, the probability and or impact. So mitigation. Now we have three positive risk events.

So we have exploiting, sharing and enhancing. Exploiting means that we know the risk is going to happen, so let’s take advantage of it. Sharing is we partner, sometimes called a teaming agreement that we partner with someone else to share the risk. It could be another company. It could be that we do this internally. Like if we buy so many laptops, we get a discount. This is a positive risk. And then enhancing, you try to change the conditions to make a positive risk happen. Like crashing an activity to get done early is enhancing, managing positive and negative acceptance.

So laws, constraints, discounts, weather, anything that’s force major is acceptance. Or it could be small, little risk. Just to add on here, we had those two terms. We had residual risk and secondary risk. Residual risk, small, tiny risks that are kind of left over like residue. Generally we accept these, they’re pretty tiny. Generally secondary means it’s a whole new risk. It may not be tiny, it could be significant. It’s like a domino effect. So residual residue, secondary, like a domino effect. Okay, great, keep moving on.