How Should Product Teams Deal With Risks?

Simplifying risk management to accelerate value creation

Originally published in GoRetro

Whether you like it or not, you’ve got to deal with risks. It doesn’t matter if you’re trying to get a product in the market or create new features. You’ve always got a certain risk level ahead of you.

Dealing with risks has different aspects. Some teams overreact to it and mind every single step. Other teams ignore risks and do what they believe makes the most sense.

Neither ignoring risks nor being fearful will help you create outstanding products.

Finding balance is essential to ensure progress and remain open to the new. I’m not a conservative person. I used to ignore risks and focus solely on opportunities. Many times that worked, but when it didn’t, failures were painful. Extremes don’t give you the best chance to create value.

Allow me to share my take on managing risks mindfully. I hope that you will gain insights to apply from today on.

What Are Risks?

Risk management comes from classic project management. A risk is an uncertain event that can potentially occur and damage the project. Understanding risks upfront is important to make informed decisions.

Many Product Managers, including me, dislike the term risk management because it connects to traditional project management. Well, risk management is part of your job as a product professional.

The critical aspect is understanding risk characteristics before jumping into action:

• Impact: If the risk becomes a reality, what would happen? It can be a low impact, which you may accept, or a high impact that you must avoid, or your initiative becomes inviable.
• Probability: This is a tricky aspect. It’s more like a guessing game, but you need to reflect on the probable chance the risk can happen.

Based on these parameters. You can have a simple matrix 2x2, prioritize the identified risks, and decide what to do. Risks with low impact, I’d recommend you to ignore. High-impact risks should be either mitigated or avoided. In other words, you better take action.