Bill (senior VP of product development): Carlos [project manager], we have to talk. I am concerned about the way we manage project risk here at Futuronics. I just came from an international "Future Mote Devices" meeting at UC Berkeley. [Note: A mote is a very small (e.g., 2- to 3-mm-square), wireless sensing pod that can be placed on land or in water to measure and communicate data.] The project management sessions receiving most attention addressed risk in product development projects. They described our management of project risk to the letter-failure to sustain risk management after the project gets rolling. It seems someone has to get burned before risk management is taken seriously.

Much to my surprise, almost all the project managers there admitted their firms have a problem sustaining team members' interest in managing risk after the project is on its way. The old saying "If you don't manage risk, you pay the price later" generated horror stories from a few who paid the price. We spent some time brainstorming ways to handle the problem at the project level, but there were very few concrete suggestions. The meeting gave me a wake-up call. Carlos, we need to tackle this problem or some new or known risk event could put us both out of a job. The similarities between their horror stories and some of our past mistakes are scary.

Since here at Futuronics we only develop new products that are at least seven years beyond anything on the market, the level of both "known risk events and unknown risk" is far higher than in most other organizations. Managing project risk is important to every project. but here at Futuronics every new product project is loaded with risks. Carlos, I'm willing to work with you to improve our management of project risk at Futuronics.

Carlos: Bill. I am aware of the problem. The PMI roundtables I attend also talk to the difficulty of keeping teams and other stakeholders willing to revisit risk once the project is on its way. [PM roundtables are monthly meetings of practicing PMs across industries designed to address project management problems.] I also heard war stories at a recent project management roundtable meeting. I have some notes from the meeting right here.

It all started with the leader's question; "How many project managers actually manage risk over the complete project life cycle?"

PM 1: We all work through the risk management process well before the project begins. We have the process template of risk identification, assessment, response, control, risk register, and contingency down pat. We just don't follow through after the project begins. I think interest dies. Have you ever tried to get project stakeholders to come to a risk meeting when the project is moving relatively well?

PM 2: A recent e-mail from one of our stakeholders said, "We'll deal with it [risk] when it happens.'

PM 3: I agree. Interest seems to move from future oriented to reactionary. Also, risk management seems to degenerate into issue (concerns and problems) management versus real risk management.

PM 4: I ask team members, "What is the risk of not managing risk over the life of the project?" Sometimes this question nudges a few to respond positively, especially if risks have changed or new ones are perceived. I use a failed project where a solid risk management process would have avoided the project failure. I explain all of the risk management processes that would have helped to improve the risk elements-risk identification, triggers, responsibility, transfer, accept, etc.

PM 5: Risk is not a line item in the budget or schedule. Maybe it is in the management reserve to cover "unknowns of unknowns." I have to watch that management doesn't try to squeeze out the budget for something else.

Carlos continued to share with his boss that there were many more comments, but very few gave much guidance. Carlos then shared his idea:

Carlos: Colette is our best trainer, especially in transition management, and she would be a great choice for following through on this problem. Her training classes on upfront risk management are excellent. Should we ask her to present a session?

Bill: You are right, Carlos; Colette is ideal. She is smart and a great team motivator. Ask her, but give her some kind of direction for focus.

A few days later, Carlos sent out a memo:

Colette, this is to follow up on our lunch conversation yesterday discussing sustaining risk management after the project is on its way. Given the nature of our futuristic company, we should stress the point that our product development projects carry many more inherent risks than do traditional projects. I suggest the training classes should drill down on concrete actions and policies that will encourage the interest of team members and other project stakeholders in sustaining risk management practices during project execution.

Colette, we appreciate your taking on this project. When you have developed your training session, please give me a copy so I can schedule and support your efforts.

Regards, Carlos

• Why do project stakeholders lose interest in project risk after the project is underway?

• What are the dangers of not keeping on top of risk management during implementation?

• What kind of business is Futuronics in?

• Suggest three concrete actions/scenarios that will encourage project stakeholders to support risk management while projects are being implemented