Risk assessment by certainty of cost and value

Risk assessment by certainty of cost and value

When assessing the risks of a new piece of work the questions should be around how certain are we about the cost and value of the work. The more certain we are about the cost of a piece of work and the value of the outcomes, the lower risk of the work. This leads to prioritising more certain work over less certain, and making more uncertain work less uncertain.

Certainty and uncertainty in value and duration

John Cutler tweeted about how he approaches forecasting with a team, and shared a Google Doc explaining the method.

Certainty and uncertainty in value and duration

One the second page was this:

Certainty and uncertainty in value and duration

This is important. It made me realise that initiatives can / should be considered / assesses / prioritised / forecasted on how certain or uncertain the value they will deliver is, and how certain or uncertain the duration is. Initiatives of unknown duration and unknown value are high risk compared to those of known value and known duration.

So, we need to have a reliable method for forecasting cycle time (not estimating effort time) to arrive at a known duration, and for establishing value (including cost of delay) as a known quantity.

Making these method of prioritisation explicit, reliable and robust is vital for across the organisation (not just within the digital department or within the scrum team) in order to be part of the mind shift towards delivering value continuously.

Prioritising parking spaces

In an office with more people than parking spaces, we needed a fair way of choosing who should get one.

There are various ways we could have done but the best solution was priority based on length of service, so the longer you’ve worked at the office the higher up the list you go.

There are two reasons this is such a good solution:

  1. Length of service is a fact, and choosing who gets a parking space based on fact rather than opinion has clarity and transparency, and is easy to understand. And it turns parking into a benefit of long service.
  2. It means the older team members who are more in need of a parking space get one without getting into uncomfortable discussions about health, medical conditions, or who is most in need.

Even everyday things like allocating parking spaces require a method of prioritisation.

Finding the right way to prioritise is vital. Using facts is great. Making it clear and easy to understand for the people involved is important. Gaining additional benefits as a result of the method is a good thing to achieve too.