Managing Risk Revision

To manage risks properly, we must allocate resources to implement a risk management plan. Some resources must be allocated in advance of anticipated risk events, and some must be held in reserve "just in case."

Many organizations have difficulty allocating these resources, especially when resources are thin and risks haven't yet materialized. The temptation to hope that all will go well can lead some to attempt projects with insufficient reserves for risks. And it can lead others to deny that specific risks can ever occur.

For example, despite decades of widely accepted predictions, the U.S. government failed to provide adequate resources to New Orleans for hurricane-induced flood risk mitigation and planning.

In the project environment, at best, project managers or risk officers identify risks and propose resources to mitigate them. Project sponsors and organizational management then review these proposals for sufficiency and reasonableness. They negotiate with the project staff as necessary, and then they allocate appropriate resources for risk mitigation and management.

In many organizations, things rarely work that way. Organizations commit themselves to risk plans that amount to little more than naïve hopes and wishes for the best. How does this happen?

In some cases, the available resources cannot cover all identified risks unless everything breaks favorably. When someone identifies a risk that's expensive to manage, risk revision, exclusion, or denial enables those involved to commit to the effort despite resource shortages. When this happens, risks that do materialize can threaten the project — or worse, threaten the enterprise.

What can organizations do to manage risk revision?

One approach involves adding to the project plan an Appendix of Revised or Excluded Risks — risks that someone proposed, but which were edited before inclusion in the risk plan, or excluded altogether. For each revised risk, the appendix includes the original proposed risk, a revision history with dates, the arguments in favor of and against such revisions, and the names of all involved in each revision decision. The Appendix of Revised or Excluded Risks serves several purposes.

Audit trail

If the organization someday decides how particular risk types are to be addressed, the Appendix becomes a useful tool to help project teams bring their projects into compliance.

Deterrence

When available resources
can't cover all identified
risks, we sometimes
revise the risks

To whatever extent organizational politics or intimidation play any role in risk revision or exclusion, the knowledge that revision decisions will be recorded in the Appendix might deter some intimidators or some who abuse political power to achieve their ends.

Support for organizational learning

The Appendix could provide useful data for project retrospectives, or even earlier, if trouble does appear during the project's execution.

If you think risk revision and denial aren't happening in your organization, you might want to add that observation to your Appendix of Revised or Excluded Risks.  Top    Next Issue

Projects never go quite as planned. We expect that, but we don't expect disaster. How can we get better at spotting disaster when there's still time to prevent it? How to Spot a Troubled Project Before the Trouble Starts is filled with tips for executives, senior managers, managers of project managers, and sponsors of projects in project-oriented organizations. It helps readers learn the subtle cues that indicate that a project is at risk for wreckage in time to do something about it. It's an ebook, but it's about 15% larger than "Who Moved My Cheese?" Just . Order Now! .

Your comments are welcome

About Point Lookout

Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Project Management:

An Agenda for Agendas

Most of us believe that the foundation of a well-run meeting is a well-formed agenda. What makes a "well-formed" agenda? How can we write and manage agendas to make meetings successful?

Dubious Dealings

Negotiating contracts with outsourcing suppliers can present ethical dilemmas, even when we try to be as fair as possible. The negotiation itself can present conflicts of interest. What are those conflicts?

The True Costs of Cost-Cutting

The metaphor "trimming the fat" rests on the belief that some parts of the organization are expendable, and we can remove them with little impact on the remainder. Ah, if only things actually worked that way...

Project Improvisation and Risk Management

When reality trips up our project plans, we improvise or we replan. When we do, we create new risks and render our old risk plans obsolete. Here are some suggestions for managing risks when we improvise.

When Change Is Hard: II

When organizational change is difficult, we sometimes blame poor leadership or "resistance." But even when we believe we have good leadership and the most cooperative populations, we can still encounter trouble. Why is change so hard so often?

See also Project Management and Workplace Politics for more related articles.

Forthcoming issues of Point Lookout

Coming June 3: Capability Inversions and the Dunning-Kruger Effect

A capability inversion occurs when the person in charge of an effort is far less knowledgeable about the work involved or its purpose than are the people doing that work. In capability inversions, the Dunning-Kruger effect can intensify group dysfunction, sometimes severely disrupting the effort. Available here and by RSS on June 3.

And on June 10: They Don't Reply to My Email

Ever have the experience of sending an email message to someone, asking for information or approval or whatever, and then waiting for a response that comes only too late? Maybe your correspondent is an evil loser, but maybe not. Maybe the problem is in your message. Available here and by RSS on June 10.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenmhXARWRMUvVyOdHlner@ChacxgDmtwOKrxnripPCoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

• Get 2001-2 in Geese Don't Land on Twigs (PDF, )
• Get 2003-4 in Why Dogs Wag (PDF, )
• Get 2005-6 in Loopy Things We Do (PDF, )
• Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, )
• Get 2009-10 in The Questions Not Asked (PDF, )
• Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, )

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500 words in your inbox in one hour. License any article from this Web site. More info

Public seminars

Bullet Points: Mastery or Madness?

Decision-makers in modern organizations commonly demand briefings in the form of bullet points or a series of series of bullet points. But this form of presentation has limited value for complex decisions. We need something more. We actually need to think. Briefers who combine the bullet-point format with a variety of persuasion techniques can mislead decision-makers, guiding them into making poor decisions. Read more about this program.

Here are some dates for this program:

• Time: 12:00 Eastern Time. Place: Wherever you are. It's a Webinar.: June 24, Monthly Webinar, sponsored by Technobility Webinar Series. Register now.
   
• Time: 6:00 PM Eastern Time. Place: Wherever you are. It's a Webinar.: June 24, Monthly Webinar, sponsored by Technobility Webinar Series. Register now.
   

The Power Affect: How We Express Our Personal Power

Many people who possess real organizational power have a characteristic demeanor. It's the way they project their presence. I call this the power affect. Some people — call them power pretenders — adopt the power affect well before they attain significant organizational power. Unfortunately for their colleagues, and for their organizations, power pretenders can attain organizational power out of proportion to their merit or abilities. Understanding the power affect is therefore important for anyone who aims to attain power, or anyone who works with power pretenders. Read more about this program.

• A recording of a program presented June 29, 2017, Monthly Webinar, sponsored by Technobility Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.