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Chapter 03 - Scrum Aspects

39. Risk Attitude

So one of the first activities we're going to engage in, and one of the activities that we do on an ongoing basis within Scrum, is identify potential risks to be dealt with. We may get these from previous lessons learned in other Scrum projects. We may use various risk checklists provided by the Scrum guidance body to check off various types of prompt lists. We may run brainstorming sessions with the team and other stakeholders to identify potential risks. We may in fact establish what we'll call a "risk breakdown structure," where we take certain risks and decompose them into sub-risks and various types of potential issues that need to be dealt with.

And then, in certain cases, we may not fully understand what a risk might even mean. And we might do a bit of an experiment, what we'll call a "risk-based spike," where we actually take a particular risk that we're trying to size and actually work it out. So, for example, if we think we have a development risk in being able to build a certain capability, maybe I'm going to do a very intensive short experiment where I can prove to myself whether or not we can, in fact, do that and whether we can, in fact, mitigate the risk that maybe we have never done this particular type of solution before and we're not quite sure if we can do it or not.

So at the very beginning of risk activities, we need to identify what's in front of us. Now, keep in mind that risks exist all the time, whether we know about them or not. And so the question we really want to be thinking about, especially as a Scrum master, is: are the risks that you understand better than those that you don't understand? So we want to take the time to identify the risks that are out there, because then we can be more proactive in helping to facilitate appropriate risk responses from our Scrum team.

40. Risk Identification

Once we've actually identified the risks in question Now we want to understand the broader context. What does this risk mean? What would happen if this risk became true, if this risk were ultimately realized? So here we want to assess the risk for impact, for the probability it's going to happen, and also for proximity. How soon is this likely to become a risk and possibly an issue?

And I probably want to focus on the ones that are really close to me first because the ones that are really far away may never happen. We may never deal with those at all. So, as scrum masters, we might facilitate the creation of risk meetings to both do the risk identification and identify how it is in fact. We'll try to quantify both the impact and potential risk responses. We can use techniques like probability trees to examine the relative likelihood that certain risks will be realized, as well as how those risks may have financial and other consequences.

We may do a parado analysis to look at the most likely risks and be able to effectively order the risks according to likelihood or according to impact. And given a particular set of risks and impacts, we might produce what's called a probability impact grid. And what a probability impact grid effectively allows us to do is assess, given a large number of risks, where we should focus and direct our response efforts. Finally, and most importantly, what is the expected monetary value of that risk—whether it is an opportunity or a threat? And then, given that, what do we need to do to put in place an appropriate risk response strategy?

41. Risk Assessment

Once we've actually effectively identified a set of risks, we're going to treat risks just as we do user stories in the product backlog. We want to create a list of prioritised risks, and we want to integrate those directly against the user stories to be able to identify within any particular sprint any particular risks that that sprint needs to be working to mitigate. And so one of the things you'll end up doing is combining this set of prioritised risks with the prioritised product backlog of user stories to have an integrated set of prioritised orders of action. And so you're going to, when you do a particular sprint plan, look at user stories to produce but also at various risks that need to be mitigated.

42. Risk Prioritization

Once we've done an assessment of the risks, it's really time to make a plan to figure out what we're going to do. If a particular risk is realized, or if there are certain things that we can do to reduce the likelihood of a risk being realized, Is there a plan B? If this risk actually comes true, how much of this risk can we effectively mitigate? And then, how much of this do we have to accept? All right, again, from the business's perspective, the product owner owns the business aspects of the risks, but it's really up to the Scrum team to figure out how we're going to respond to the risks. In reality, our role is to assist the scrum master. How do we create visibility of the risks and the risk assessment impact? How do we create awareness and communicate the risks to the appropriate stakeholders? And then how do we encourage the Scrum team to identify appropriate responses to be able to manage and mitigate those?

43. Risk Mitigation

So just as we've talked about other kinds of burndown charts, there is a notion of a risk burndown chart as well. Now, keep in mind that risks are continuously identified throughout a project's lifecycle. So we don't deal with a fixed number of risks, but we may deal with implementing various mitigation activities throughout different sprints. So at the beginning of the first sprint here, maybe I have somewhere between 25 and 30 risks where I have exposure and I need to implement mitigation strategies. By the time I get down to the sixth sprint, we're down to five exposures left. And hopefully, by the time we're done here, we'll have dealt with all of them.

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