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How to manage risks in agile organizations?

Is risk management even a legit topic in agile organizations? Generally speaking, something always goes wrong in projects, even in agile ones. But, risk management is often a neglected topic in agile projects. So it's pretty understandable when adopting an agile mindset, as risk management in agile methodology is integral and built into an Agile team's day-to-day operations.  

Not to mention that agility helps projects avoid the most significant risk. For example, the possibility of not delivering or releasing a product or service on time or later than due remains the most considerable risk for all projects. However, these risks will never become a reality when using agile methodologies. Since the focus is on short sprints and multiple phased-out deliveries, in addition to consistent customer feedback that helps shape future upcoming deliveries, we can rest assured that agile organizations are already risk controlled.

However, traditional waterfall risk management proposes a more rigorous approach to risk management strategies for many companies than agile. Agile methodology is successful by design. However, when applied across various industries such as construction, manufacturing, or even healthcare, its lack of formal risk management practice negatively affects sectors that require a much more structured risk management strategy to meet project delivery requirements.

So as per Jeff Sutherland and before starting any project, always make sure you are aware that projects, in general, involve three major types of risks:

1. Financial Risk

2. Business Risk

3. Technical Risk

A cycle of four processes is majorly adopted to control risk in agile project management. These four risk control steps involved in agile project management are:

1. identifying risks

2. making an assessment

3. considering responses

4. analyzing reviews 

Since the process is designed in short feedback loops, dangers are automatically taken care of. The process itself is intended to reduce the risk continuously. As you already know, the agile, iterative model uses short cycles known as the PDCA cycle, which is composed of different phases. The best approach to managing risk throughout the process is following the risk control steps involved in agile project management mentioned above. It means the Planning phase goes through the four stages of risk control, moving to the design phase, repeating the same four steps, and so on.

The process is transparent, and the risks previously identified might impact the current iteration when you finish the first sprint and move on to the second. Be sure to make it visible on a board and thoroughly discuss it at the 24-hour regular meeting, keeping all risks under control upon running the second sprint. What happens two to three months down the road? When collecting feedback for the backlog, all risks should be documented and recorded in what can be called a risk-adjusted backlog.

Risk is always there, and there is no magical way to avoid it altogether. Instead, one should adopt more risk-oriented processes to better recognize the nature of risks and brace the team for impact or at least soften the setbacks.

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