Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 10, Issue 12;   March 24, 2010: Risk Management Risk: II

Risk Management Risk: II

by

Risk Management Risk is the risk that a particular risk management plan is deficient. Here are some guidelines for reducing risk management risk arising from risk interactions and change.
"Taking an observation at the pole."

"Taking an observation at the pole." The photo shows a member of the Amundsen expedition (probably Roald Amundsen himself) taking an observation to confirm his achieving the South Pole on December 14, 1911. Seen in the background is the line of the horizon. Most of the journey to the pole and back consisted of crossing a plateau and an ice sheet. Since both were (and are) essentially free of landmarks, navigation was a critical safety factor. To ensure his safe return, Amundsen marked his poleward path with snow cairns at three-mile intervals, each sturdily built and two meters high, one visible from the next. Each contained a record of its position, the distance to the last supply depot, and the bearing to the previous cairn. In this way, to reach the next depot on his return, he did not have to rely on the weather being clear enough for a sun sighting. In case somehow he missed his trail, he marked his depots with flags, across his path, spaced every half-mile, each flag numbered and bearing a record of the distance and bearing to the depot. His dogs also left behind a trail of spoor, which, being dark in color, stood out against the ice and snow, marking the trail for the return trip. All of these measures comprised Amundsen's approach to mitigating navigational risk on his return. They protected him against inability to sight the sun, against compass loss or failure, against whiteout, and against wind-driven erasure of his tracks. Moreover, these measures, taken together, were either noninteracting or only weakly interacting. It was a fiendishly clever design. Photo by Steve Nicklas, NOS, NGS. Courtesy U.S. National Oceanic and Atmospheric Administration. The photo originally appeared in The South Pole: an account of the Norwegian Antarctic expedition in the "Fram," 1910-12, by Roald Amundsen. Volume 2: p. 112.

In Part I of this two-part series, we examined the organizational and political risks of risk management plans and processes. Now we turn to the risks that arise from change and from the interactions between risks.

Risk dynamics risk
Risk is a dynamic attribute of projects. Even if a project were frozen in place, its risk probabilities and risk impacts could change, because its environment changes. It's necessary to review risk plans with a frequency compatible with the volatility of the risk environment, which is itself difficult to estimate.
Indicators of risk dynamics risk include risk plans that remain unchanged for long periods of time; budgets and schedules that omit risk reviews or perhaps schedule them infrequently; and retrospectives that don't address risk review. If these indicators are present, risk dynamics risk is also likely present.
Intra-project risk interactions
Risk interactions within a given project are especially problematic. Two risks might seem independent, but the probability of one occurring might change if the other materializes; or the response to one risk might alter the consequences of or the probabilities of materialization of others; or the response to one risk might limit the project's ability to respond to another.
For instance, if Arthur is backup for both Tory and Chris, all's well, as long as either Tory or Chris is available. If both become unavailable, we have trouble.
The method known as morphological analysis developed by Fritz Zwicky, is useful for uncovering intra-project risk interactions. In this method, you examine all pairs of risks and ask, "If both risks materialize, will our planned responses still be effective?" If you find that the answer is "no," you can revise your plan. You can generalize this procedure to triples of risks, quadruples, and so on. For more on morphological analysis, see the article by Tom Ritchie at the Web site of the Swedish Morphological Society. Or take your pick from hundreds of sources.
Inter-project risk interactions
An inter-project risk interaction occurs when conditions in a given project change risk probabilities in another project, or cause risks to materialize in another project.
For example, If Arthur is backup for both
Tory and Chris, all's well,
as long as either Tory or
Chris is available
suppose two projects are scheduled to use the same resource serially. If the first project is delayed, the availability to the second project of that same resource changes. At the time of development of the risk plan of the second project, knowledge about the strategies and risks of the first would have been useful, but such information, sadly, is rarely shared.
To limit inter-project risk interaction risk, coordinate risk reviews with projects likely to transmit risk back and forth. If the risk profile of one of the projects changes, there is enhanced probability of impact on the other.

Most risk conditions are connected to at least a few other risk conditions, either internal or external to the project. Maps of these connections can be very helpful. First in this series  Go to top Top  Next issue: Biological Mimicry and Workplace Bullying  Next Issue

303 Secrets of Workplace PoliticsIs every other day a tense, anxious, angry misery as you watch people around you, who couldn't even think their way through a game of Jacks, win at workplace politics and steal the credit and glory for just about everyone's best work including yours? Read 303 Secrets of Workplace Politics, filled with tips and techniques for succeeding in workplace politics. More info

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Related articles

More articles on Project Management:

The Leonard P. Zakim Bunker Hill BridgeThe Cheapest Way to Run a Project Is with Enough Resources
Cost reduction is so common that nearly every project plan today should include budget and schedule for several rounds of reductions. Whenever we cut costs, we risk cutting too much, so it pays to ask, "If we do cut too much, what are the consequences?"
"Taking an observation at the pole."The Risky Role of Hands-On Project Manager
The hands-on project manager manages the project and performs some of the work, too. There are lots of excellent hands-on project managers, but the job is inherently risky, and it's loaded with potential conflicts of interest.
A visual illusionScope Creep and the Planning Fallacy
Much is known about scope creep, but it nevertheless occurs with such alarming frequency that in some organizations, it's a certainty. Perhaps what keeps us from controlling it better is that its causes can't be addressed with management methodology. Its causes might be, in part, psychological.
The deadline at Rock Island Prison during the U.S. Civil WarIrrational Deadlines
Some deadlines are so unrealistic that from the outset we know we'll never meet them. Yet we keep setting (and accepting) irrational deadlines. Why does this happen?
The Leonard P. Zakim Bunker Hill BridgePlanning Disappointments
When we plan projects, we make estimates of total costs and expected delivery dates. Often these estimates are so wrong — in the wrong direction — that we might as well be planning disappointments. Why is this?

See also Project Management and Personal, Team, and Organizational Effectiveness for more related articles.

Forthcoming issues of Point Lookout

A meeting in a typical conference roomComing April 3: Recapping Factioned Meetings
A factioned meeting is one in which participants identify more closely with their factions, rather than with the meeting as a whole. Agreements reached in such meetings are at risk of instability as participants maneuver for advantage after the meeting. Available here and by RSS on April 3.
Franz Halder, German general and the chief of staff of the Army High Command (OKH) in Nazi Germany from 1938 until September 1942And on April 10: Managing Dunning-Kruger Risk
A cognitive bias called the Dunning-Kruger Effect can create risk for organizational missions that require expertise beyond the range of knowledge and experience of decision-makers. They might misjudge the organization's capacity to execute the mission successfully. They might even be unaware of the risk of so misjudging. Available here and by RSS on April 10.

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