Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 8, Issue 22;   May 28, 2008: Managing Risk Revision

Managing Risk Revision

by

Prudent risk management begins by accepting the possibility that unpleasant events might actually happen. But when organizations try to achieve goals that are a bit out of reach, they're often tempted to stretch resources by revising or denying risks. Here's a tactic for 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."

Damage to the Interstate 10 Twin Bridge across Lake Pontchartrain

Damage to one of the low causeway sections of the Interstate 10 Twin Bridge across Lake Pontchartrain, following Hurricane Katrina in 2005. The storm surge brought by the hurricane raised the water level high enough to trap air beneath the concrete causeway's spans, causing them to float off the bridge pier caps. (See Chen, et al., Analysis of the Interstate 10 Twin Bridge's Collapse During Hurricane Katrina). The bridge was built in 1963, when the effects of hurricane storm surge were already understood, though not as well as they are now. Two other nearby bridges, a railroad bridge and the US 11 bridge, withstood the storm with only minor damage. The U.S. 11 bridge opened February 18, 1928. It survived, in part, because its concrete girders are arched, and therefore trapped a smaller volume of air under its spans, reducing their effective buoyancy during the storm surge.

Back in 2001, the exposure of New Orleans to hurricane risk was so well known that it was the subject of a superb article in Scientific American (See M. Fischetti, Drowning New Orleans). Moreover, the storm's effects on the bridges were entirely predictable — explaining them entailed no new engineering discoveries. One can easily speculate about how the outcome of Katrina might have differed if resources for risk study and mitigation had been made available, but one also wonders what disasters elsewhere are yet preventable. Photo by Commander Mark Moran, Lt. Phil Eastman and Lt. Dave Demers, NOAA. Courtesy U.S. National Oceanic and Atmospheric Administration.

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. Go to top Top  Next issue: Virtual Presentations  Next Issue

How to Spot a Troubled Project Before the Trouble StartsProjects 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

Would you like to see your comments posted here? rbrenyrWpTxHuyCrjZbUpner@ChacnoFNuSyWlVzCaGfooCanyon.comSend me your comments by email, or by Web form.

About Point Lookout

This article in its entirety was written by a 
          human being. No machine intelligence was involved in any way.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.

This article in its entirety was written by a human being. No machine intelligence was involved in any way.

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:

Rough-toothed dolphinThe Injured Teammate: I
You're a team lead, and one of the team members is very ill or has been severely injured. How do you handle it? How do you break the news? What does the team need? What do you need?
The U.S. F-35 Lightning II joint strike fighter lifts off for its first training sortie March 6, 2012, at Eglin Air Force Base, FloridaWishful Thinking and Perception: II
Continuing our exploration of causes of wishful thinking and what we can do about it, here's Part II of a little catalog of ways our preferences and wishes affect our perceptions.
Rapids in a northern streamThe Risks of Too Many Projects: I
Some organizations try to run too many development projects at once. Whether developing new offerings, or working to improve the organization itself, taking on too many projects can defocus the organization and depress performance.
Lt. Gen. Donald Kutyna, Ret., when he was Commander of the U.S. Space CommandMore Obstacles to Finding the Reasons Why
Retrospectives — also known as lessons learned exercises or after-action reviews — sometimes miss important insights. Here are some additions to our growing catalog of obstacles to learning.
A workplace training sessionTen-Minute Training
Despite decades of evolution of technology-assisted workplace learning, instructor-led classroom formats remain the most popular and effective. Now perhaps videoconferencing can help to achieve that effectiveness at lower cost.

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

Forthcoming issues of Point Lookout

A game of Jenga underwayComing September 4: Beating the Layoffs: I
If you work in an organization likely to conduct layoffs soon, keep in mind that exiting voluntarily before the layoffs can carry significant advantages. Here are some that relate to self-esteem, financial anxiety, and future employment. Available here and by RSS on September 4.
A child at a fork in a pathAnd on September 11: Beating the Layoffs: II
If you work in an organization likely to conduct layoffs soon, keep in mind that exiting voluntarily can carry advantages. Here are some advantages that relate to collegial relationships, future interviews, health, and severance packages. Available here and by RSS on September 11.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenyrWpTxHuyCrjZbUpner@ChacnoFNuSyWlVzCaGfooCanyon.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:

Reprinting this article

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 500-1000 words in your inbox in one hour. License any article from this Web site. More info

Follow Rick

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at X, or share a post Subscribe to RSS feeds Subscribe to RSS feeds
The message of Point Lookout is unique. Help get the message out. Please donate to help keep Point Lookout available for free to everyone.
Technical Debt for Policymakers BlogMy blog, Technical Debt for Policymakers, offers resources, insights, and conversations of interest to policymakers who are concerned with managing technical debt within their organizations. Get the millstone of technical debt off the neck of your organization!
Join the Organizational Politics Group at LinkedIn.comJoin the Office Politics, Workplace Politics and Organizational Politics discussion group at LinkedIn.com, the premier professional networking Web site.
Go For It: Sometimes It's Easier If You RunBad boss, long commute, troubling ethical questions, hateful colleague? Learn what we can do when we love the work but not the job.
303 Tips for Virtual and Global TeamsLearn how to make your virtual global team sing.
101 Tips for Managing ChangeAre you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt?
101 Tips for Effective MeetingsLearn how to make meetings more productive — and more rare.
Exchange your "personal trade secrets" — the tips, tricks and techniques that make you an ace — with other aces, anonymously. Visit the Library of Personal Trade Secrets.
If your teams don't yet consistently achieve state-of-the-art teamwork, check out this catalog. Help is just a few clicks/taps away!
Ebooks, booklets and tip books on project management, conflict, writing email, effective meetings and more.