Any project's success depends on proper planning, and everyone working on it should at least know the start and finish dates. Just as important is making the entire team's tasks transparent, making sure they're all on the same page.
Digging deeper, a well-developed successful plan includes failure. Benjamin Franklin said it best, "a failure to plan is a plan for failure." If you frequent the Fab Times, you know we're a fan of Ben.
Although the name didn't exist nearly 250 years ago, old Ben was on to something. If you didn't know any better, he described the Failure Mode and Effects Analysis process!
One of the many advantages of applying Failure Mode and Effects Analysis (FMEA) comes with assessing the risk associated with any failure and deciding on corrective action to fix that issue. Companies perform FMEAs early during the design phases and then find and correct weaknesses.
For risk assessment, there is no one-size-fits-all approach. Risk management is a complicated process with many variables and potential pitfalls. When businesses implement new processes or procedures, they should outline the risks and create contingencies in case something goes wrong. That way, when things go wrong, there is a plan to minimize the damage and get things back on track as quickly as possible.
When implementing any new system or process within your company, ask yourself: "how does this open you up to risk?" If identifying risk areas, take steps to mitigate them before proceeding with implementation.
Let's look at some key considerations when implementing a risk management process.
Key Considerations When Implementing FMEA
Identify Processes
Each process within your organization has the potential to be affected by risk, and it's important to consider all those processes when creating a risk management plan.
First, identify which processes are most likely to be impacted by risk. Once you have some processes to focus on, identify those that may be risky. By identifying risky processes early on, you can take steps to ease those risks before they affect your business negatively.
Take this opportunity to determine which processes to streamline or automate, helping reduce the risk of human error and increase the process's speed to completion, potentially positively affecting your bottom line.
Identify Key Events and Activities
Once you've identified the processes most likely to be impacted by risk, narrow down which specific events and activities are most likely to be affected by risk, and think about which events or activities within a given process could go wrong.
To better understand the potential issues associated with each event or activity, create a plan to mitigate that risk and reduce the likelihood of encountering issues.
For example, let's say you are in the process of developing a new software product. You've decided that performing user testing to identify potential issues with the product's design is one of the riskiest activities associated with developing the product. Once you have identified this as a concern, you brainstorm ways to reduce the risk associated with this event. You might hire a usability testing company to perform user testing at an outside facility, so the testing process does not affect your customers, and the results will be more accurate.
Assess Risk Level
Once you've identified the events and activities within a given risky process, take the next step and assess the risk associated with each event or activity. With a better understanding of the associated risks, create plans for reducing those risks.
Let's go back to the example of developing a new software product. You've determined that user testing the software is one of the riskiest activities associated with product development. Assess the level of risk associated with customer testing and brainstorm ways to reduce the associated risk. At this point, you might use automated software testing tools to conduct the testing remotely.
Assessing The Likelihood of Failure
After assessing the risk associated with each event or activity, identify ways to reduce the likelihood of each event or activity failing.
Let's go back to the example of developing a new software product.
You've:
- Determined that testing the software with customers is one of the riskiest activities associated with developing the product.
- Determined the likelihood of customers testing the software encountering issues is high.
Now, brainstorm ways to reduce the likelihood that customers testing the software will encounter issues.
One way to do this is to conduct more thorough testing with many customers, potentially reducing the likelihood that customers will encounter issues with the software. You could also add testing phases to the development process to allow more time to address issues that arise during testing.
Assessing Potential Consequences
After assessing the likelihood of failure, begin debating ways to reduce the potential consequences of each event or activity failing.
Let's go back to the example of developing a new software product.
You've:
- Determined that testing the software with customers is one of the riskiest activities associated with developing the product.
- Determined the likelihood of customers testing the software encountering issues is high.
- Debated ways to reduce the likelihood that customers testing the software will encounter issues.
Now, figure out how to reduce any negative customer consequences from those testing the software. One solution would be to offer people monetary compensation. Although you're making payments, it may be less expensive now than later.
You could also add contingency planning to the development process, which might reduce the amount of damage done if issues arise during testing.
Determining the Risk Management Strategies
Now that you've assessed the risk associated with each event or activity and brainstormed ways to reduce the likelihood of failure and the potential consequences of those failures, it's time to determine the risk management strategies for each process or activity.
Depending on the level of risk, you can choose any risk management strategy. Let's go back to the example of developing a new software product. You've determined
Back we go to the example of new software development.
You've:
- Determined that testing the software with customers is one of the riskiest activities associated with developing the product.
- Determined the likelihood of customers testing the software encountering issues is high.
- Debated ways to reduce the likelihood that customers testing the software will encounter issues.
- Figured out how to reduce any negative customer consequences from those testing the software.
Now, determine the risk management strategies you will implement to reduce the risk associated with testing the software with customers.
One way to do this is to conduct customer testing at an outside facility, potentially reducing the likelihood that customers will encounter issues while testing the software and reducing the potential consequences of issues arising during testing.
You could also add more testing phases to the development process to allow more time to address issues that arise during testing.
Implement Your Risk Management Plan
You've created a risk management plan; put it into action.
When implementing a risk management plan, it's important to be consistent: it's the key to implementing a successful risk management plan. Everyone in your organization should understand the plan's goals and know their part in achieving them.
Additional Reading
If you'd like to read more about FMEA, consider the following two articles:
In Sum
When it comes to risk assessment, there is no one-size-fits-all approach. Risk management is a complicated process with many variables and potential pitfalls.
When businesses implement new processes or procedures, they should outline the risks and create contingencies in case something goes wrong. That way, if something goes wrong, you have the plan to minimize the damage and get things back on track as quickly as possible.
When implementing any new system or process within your company, ask yourself how this could open you up to risk. If you identify areas of risk that are concerning, take steps to mitigate them before proceeding with implementation, helping improve your odds of success and positively affecting your bottom line.
What’s going to be cool will be discovering what else Ben Franklin knew that we keep discovering!