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What is Agile Risk Management? How Is It Different?

Some people might think that Agile Risk Management is an oxymoron:

  • There is a common stereotype that an Agile project is totally unplanned
  • So, why would you take a planned approach to Agile Risk Management if the whole project is unplanned?   
What Is Agile Risk Management?

There is always some level of planning in an Agile project even though the level of planning may be limited.  Here’s an article with more detail on that:

Why Is Planning So Difficult? Is It a Waste of Time?

The gist of this is that you have to adapt the planning approach to the level of uncertainty in the project.  A similar thing is true regarding risk management:

  • There is no single approach to doing risk management and
  • It’s not a binary choice between zero risk management and a totally rigid and controlled approach to risk management. 

You need to fit the risk management approach to the nature of the project:

  • For high risk projects where the customer is very sensitive to risk, it makes sense to take a planned approach to risk management
  • For lower risk projects , a more informal approach to risk management may be appropriate.

Agile Risk Management Process

The overall process for doing risk analysis in an Agile environment is generally the same as a traditional, plan-driven project; however, it may not be as formal and it may not be as disciplined.  The general approach follows these stages:

Risk IdentificationThis might consist of a brainstorming session to identify potential risks in the project
Risk AnalysisThis involves further study to determine the probability and impact of each risk
Risk ResponseThis phase involves determining what, if anything, should be done to mitigate the risk
Monitoring and ControlFinally during the course of the project, the risks are monitored and controlled

Advantages of an Agile Risk Management Approach

An Agile approach is inherently well-designed for dealing with risks:

  • Risks are generally directly related to uncertainty in a project and an Agile approach is intended to be flexible and adaptive in order to deal with uncertainty
  • For that reason, it is easier to adapt to risks in an Agile environment as the project is in progress

Risk Management in a Plan-driven Environment

In a traditional, plan-driven project:

  • A considerable amount of re-planning may be necessary to adapt to risks as the project is in progress and
  • For that reason, it may be more important to plan for risks upfront in a plan-driven environment.

Structuring an Agile Project for Risk Management

Another factor is due to the iterative and incremental nature of development in an Agile project:

  • It’s not too difficult to structure the Product Backlog to address high risk items early in the project and,
  • If there is a lot of uncertainty associated with those risks, a “spike” can be performed to evaluate the risk without having a major impact on the project.

Responsibility for Agile Risk Management

It’s easy to lose focus on risk management in an Agile environment because there is no well-defined focal point of responsibility for risk management. Risk management is normally a project management responsibility and there is typically no project manager at the team level in an Agile project:

  • In an Agile environment, the entire team owns responsibility for risk management. In a similar way, the the entire team owns responsibility for project management
  • Another factor is that because an Agile approach is more adaptive to risks, there tends to be a “cavalier” approach to not worry about risks but it doesn’t have to be that way
  • You can do as much (or as little) risk management as necessary depending on the nature of the project and the sensitivity to risk

Overall Summary

Risk management is not inconsistent with an Agile approach. In fact, an Agile approach offers many advantages for doing risk management more effectively. Developing a risk management strategy for an Agile environment is primarily a matter of:

  • Deciding how much (and what kind of) risk management is needed based on the nature of the project
  • Training the team in the basics of risk management
  • Building in some focus on thinking about risks in all of the Agile/Scrum ceremonies
  • Determining how the risk management effort will be managed:
    • How will risk management be done and
    • How will responsibilities for risk management be distributed among the team?

Related Articles

Check out the following related articles on “Agile Risk Management”:

Additional Resources

Resources for Agile Project Management Online Training.

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