80/90 Risk Efficiency Theory
The Problem: Underestimating the Cost of “Just 10% More”
In Agile and Scrum environments, Risk Efficiency often takes a back seat to delivery timelines. Many teams view improving from managing 80% of risks to 90% of risks as a marginal gain—“just 10% better,” right?
But here’s the catch: that interpretation doesn’t tell the full story.
The truth is that moving from 80% to 90% risk coverage is a 100% efficiency gain.
Here’s why:
At 80% risk coverage, 1 in every 5 risks goes unaddressed. At 90%, it’s just 1 in 10. That’s half the unaddressed risks—dramatically reducing the potential for costly surprises, like rework, delays, or scope creep.
But why does this matter? Let’s break it down with a real-world scenario.
The Cost of Ignored Risks: Team A vs. Team B
Imagine two Agile teams, both delivering $1 million in value on their projects:
- Team A: Covers 80% of risks. The 20% they miss results in disruptions that cost them $200,000.
- Team B: Covers 90% of risks. The residual 10% costs only $100,000.
Both teams deliver the same value, but Team B saves $100,000. That’s $100,000 they can reinvest in innovation, team morale, or accelerating timelines.
Risk management, when done effectively, compounds these savings over time (Risk Efficiency). It’s not just about reducing costs—it’s about building a team that’s resilient, efficient, and consistently reliable.
The Solution: Achieving 90% Risk Efficiency
So how do you close that gap? Here are five actionable strategies:
- Prioritize High-Impact Risks Early: Use sprint planning sessions to identify and address risks with the most significant potential impact.
- Enhance Transparency: Leverage tools like risk burn-down charts or visual boards to track and communicate risks across the team and stakeholders.
- Invest in Cross-Functional Training: Equip team members to proactively spot and address risks within their areas of expertise.
- Adopt Lightweight Tools or Automation: Streamline risk identification and monitoring with simple, effective tools that integrate seamlessly into workflows.
- Conduct Retrospectives with a Risk Lens: Review past sprints to identify unnoticed risks and adjust processes for continuous improvement.
Ready to Build a Resilient, High-Performing Agile Team?
Risk management isn’t just a checkbox—it’s how you sustain velocity and deliver on promises. If you’re ready to lead a team that meets delivery targets while avoiding the pitfalls others fall into, our Risk Management in Agile and Scrum Course is for you.
Join the waitlist now to take the first step toward better results, fewer disruptions, and a more empowered team. Spots are limited to ensure a high level of engagement and practical takeaways.
PS: Your stakeholders will notice. When your team consistently hits delivery targets and sidesteps costly surprises, they’ll thank you—and so will your bottom line.
Dejan Majkic
www.whatisscrum.org
