When talking with clients, I frequently use the definition of risk, “An uncertainty that matters.”   While this is certainly an easily digestible idea, it is a bit simplistic; matters to what?  So I enjoyed reading Dr. David Hillson’s recent article for Projects at Work on defining risk types.  A key point from the article was “risk matters because it has the potential to affect objectives. This means that each risk must be linked to at least one objective.”  Of course, this means that in order to conduct a risk assessment, you need to understand the objectives of the project.

A good project charter lists the objectives of the project.  The problem is, not all impacted organizational objectives find their way into the charter.  I frequently see IT projects chartered to “replace X with Y,” but not the underlying objective of “Reduce the number of IT folks required to support this business function.”  There’s also the business function’s objective of “Reduce our cost of compliance with governmental regulations.”  And the financial objective of “Reduce our annual operating expenses by $$$.”  And even the HR department’s objective of “Make it easier to find workers, by eliminating hard-to-find skill requirements.”  Or just the classic, “Give us the ability to distribute information more quickly.”

So let me suggest that we verify the objectives of the project during our stakeholder analysis.  For each identified stakeholder, ask, “What organizational objectives matter to them?”  Not which project objectives matter to them; dig deeper, to find out how the project impacts their strategic goals and objectives.  If the CFO is trying to reduce software support costs, year over year, how will this project contribute toward that objective?  If the CIO is trying to re-focus the organization on supporting fewer, key applications, how does this project get IT closer to that goal?

Once you have an understanding of the long-term vision of the organization’s leadership team, you can better identify the strategic and tactical objectives that your project will impact.  And that is a key component of understanding which uncertainties will matter, and how much they will matter.