148 Project Management
these problems and their potential effects on your project.
Obviously, you don’t have the resources to deal with every one
of these potential problems. So how do you narrow the list to a
manageable size? How do you identify the problems that threat-
en you the most and therefore demand your attention?
There are a number of methods for shortening the list. One
of the most common and straightforward consists of making
subjective judgments about two characteristics of potential prob-
lems—probabilityand impact. These terms mean exactly what
you would expect. Probability is the likelihood that the potential
problem will occur. Impact is the seriousness or severity of the
potential problem in terms of the effect on your project.
Once the probability and seriousness have been identified,
determining the “high-
threat” problems becomes
an issue of basic arith-
metic. They’re the ones
that yield the largest num-
ber when you multiply
probability and impact.
(For simplicity, let’s call it
the “threat rating.”) Figure
8-4 offers a graphical rep-
resentation of this concept.
Responding to high-
threat problems will con-
sume resources, so you
must be prudent in determining how many you choose to take
further action on. I recommend using a combination of an
agreed-upon number of problems and a predetermined lower
limit of threat rating. Below that threshold, you simply won’t
address problems. (On a 10-point rating scale, somewhere
around 30-40 is a reasonable lower limit.) Above the lower limit,
you can force rank problems and agree upon how many the
team will take further action on. (The top five is probably a rea-
sonable number.)
Clarify the Terms!
When assessing the
probability and impact of
potential problems, a 5- or 10-point
rating scale is often used.Whatever
scale you choose, take time to clarify
the terms you use.This way, when a
team member suggests that the impact
is a 3, for example, others will have a
sense of what that means.Without this
type of clarification, differences in
understanding could undermine an
already subjective process.