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 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. 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
Would you like to see your comments posted here? rbrenhZLYrRMtUnyjppRsner@ChacotqZAFalhYTBMgJWoCanyon.comSend me your comments by email, or by Web form.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:
Declaring Condition Red
- High-performance teams have customary ways of working together that suit them, their organizations,
and their work. But when emergencies happen, operating in business-as-usual mode damages teams —
and the relationships between their people — permanently. To avoid this, train for emergencies.
Dispersity Adversity
- Geographically and culturally dispersed project teams are increasingly common, as we become more travel-averse
and more bedazzled by communication technology. But people really do work better together face-to-face.
Here are some tips for managing dispersed teams.
Team Thrills
- Occasionally we have the experience of belonging to a great team. Thrilling as it is, the experience
is rare. How can we make it happen more often?
Project Improvisation as Group Process
- When project plans contact reality, things tend to get, um, a bit confused. We can sometimes see the
trouble coming in time to replan thoughtfully — if we're nearly clairvoyant. Usually, we have
to improvise. How a group improvises tells us much about the group.
On the Risk of Undetected Issues: II
- When things go wrong and remain undetected, trouble looms. We continue our efforts, increasing investment
on a path that possibly leads nowhere. Worse, time — that irreplaceable asset — passes.
How can we improve our ability to detect undetected issues?
See also Project Management and Workplace Politics for more related articles.
Forthcoming issues of Point Lookout
Coming January 27: Cost Concerns: Comparisons
- When we assess the costs of different options for solving a problem, we must take care not to commit a variety of errors in approach. These errors can lead to flawed decisions. One activity at risk for error is comparing the costs of two options. Available here and by RSS on January 27.
And on February 3: Cost Concerns: Bias
- When we consider the costs of problem solutions too early in the problem-solving process, the results of comparing alternatives might be unreliable. Deferring cost concerns until we fully understand the problem can yield more options and better decisions. Available here and by RSS on February 3.
Coaching services
I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenhZLYrRMtUnyjppRsner@ChacotqZAFalhYTBMgJWoCanyon.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 500-1000 words in your inbox in one hour. License any article from this Web site. More info
Public seminars
- 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.
- 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.
- 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.
- Bullet Points: Mastery or Madness?
Decis
ion-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.
- A recording of a program presented June 24, 2020, Monthly
Webinar, sponsored by Technobility
Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.
- A recording of a program presented June 24, 2020, Monthly
Webinar, sponsored by Technobility
Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.
- A recording of a program presented June 24, 2020, Monthly
Webinar, sponsored by Technobility
Webinar Series. PMI members can earn 1.0 Category 'A' PDU by viewing this program. View this program now.
Follow Rick





Recommend this issue to a friend
Send an email message to a friend
rbrenhZLYrRMtUnyjppRsner@ChacotqZAFalhYTBMgJWoCanyon.comSend a message to Rick
A Tip A Day feed
Point Lookout weekly feed

