
Rick Piltz (1943-2014), former senior associate in the U.S. Climate Change Science Program in the administration of President George W. Bush. He resigned his position in March, 2005, over political interference in the program. In early June, the New York Times published a story describing how Philip Cooney, chief of staff for the White House Council on Environmental Quality, had revised reports of the Climate Change Science Program to, in effect, sow doubt about the science of climate change. Following publication, Mr. Cooney resigned and accepted a position at ExxonMobil. Mr. Cooney had been engaged in tactics that support risk denial, where the risks in question are the risks associated with climate change.
Photo by Nicky Sundt courtesy GlobalChange.gov.
Discussing risk in general terms is always difficult, because many professions have their own ways of thinking about it. For now, let's regard risk as the chance of losing an asset. We measure the chance as a probability. We measure the asset in units of value.
If the probability of loss in a given time interval is P, and the value of the asset is V, the expected value of loss in that time interval is PV. In a large number of identical trials, our average loss per trial would be PV.
Sound decisions about enterprise resources do consider risk. For example, in estimating a project budget, we might consider the possibility that one of our suppliers might deliver a subsystem three months late. To manage this risk, we might reserve resources to deal with it if it occurs. If the cost of dealing with this event is V, and the probability of it occurring is P, then the reserves required are PV.
That's one example of a strategy for dealing with a risk. Fortunately, it isn't the only strategy available, and in many cases we can do much better. Here's Part I of a summary of the possible strategic options for dealing with risk, emphasizing ineffective (but very common) approaches.
- Denial
- Those in denial are those who reject the reality of the risk event.
- Slogan: "That'll never happen. You're such a worrier!"
- Advantage: Denial lets Those in denial are those
who reject the reality
of the risk eventus feel that preparation is unnecessary, because there's no risk. It can be a comforting illusion, especially for those reluctant to allocate resources to managing risk. - Danger: If the risk event occurs, we're unprepared. Worse, we can become disoriented when we find that our view of the world is fiction.
- Shock
- Shock happens when we're blindsided by the unexpected.
- Slogan: "OMG, nobody could've anticipated that."
- Advantage: If the unexpected doesn't happen, we can remain in a state of blissful ignorance.
- Danger: If the unexpected happens too late for us to take remedial action, disaster is possible.
- Acceptance
- Acceptance is the strategy for those who don't want to prepare.
- Slogan: "That might happen. We'll deal with it then."
- Advantage: It requires no advance resource allocation. If the risk event doesn't occur, no resources are expended.
- Danger: It can lead us to believe that we have less need for resources than we actually do. Acceptance is a prudent strategy only when PV is very small.
- Chaos
- This approach happens when we're so distracted by immediate events that we cannot plan for future risks.
- Slogan: "Heavens! We've been meaning to plan for that. We clean forgot!"
- Advantage: By focusing our resources elsewhere, we do accomplish some tasks. Without a risk plan, allocating resources to risk management becomes unnecessary.
- Danger: If risk events arrive before we can allocate resources to risk planning, the risk response can be inadequate, and full-scale disaster is possible.
We'll continue next time with three more risk management strategies. Next in this series Top
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Related articles
More articles on Project Management:
Remote Facilitation in Synchronous Contexts: I
- Whoever facilitates your distributed meetings — whether a dedicated facilitator or the meeting
chair — will discover quickly that remote facilitation presents special problems. Here's a little
catalog of those problems, and some suggestions for addressing them.
Durable Agreements
- People at work often make agreements in which they commit to cooperate — to share resources, to
assist each other, or not to harm each other. Some agreements work. Some don't. What makes agreements durable?
Ten Approaches to Managing Project Risks: II
- Managing risk entails coping with unwanted events that might or might not happen, and which can be costly
if they do happen. Here's Part II of our exploration of coping strategies for unwanted events.
Wishful Interpretation: II
- Wishful "thinking," as we call it, can arise in different ways. One source is the pattern
of choices we make when we interpret what we see, what we hear, or any other information we receive.
Here's Part II of an inventory of ways our preferences and wishes affect how we interpret the world.
Anticipating Absence: How
- Knowledge workers are professionals who "think for a living." When they suddenly become unavailable
because of the pandemic, we consider substituting someone else. But substitutes need much more than
skills and experience to succeed.
See also Project Management and Devious Political Tactics for more related articles.
Forthcoming issues of Point Lookout
Coming October 4: Self-Importance and Conversational Narcissism at Work: I
- Conversational narcissism is a set of behaviors that participants use to focus the exchange on their own self-interest rather than the shared objective. This post emphasizes the role of these behaviors in advancing a narcissist's sense of self-importance. Available here and by RSS on October 4.
And on October 11: Self-Importance and Conversational Narcissism at Work: II
- Self-importance is one of four major themes of conversational narcissism. Knowing how to recognize the patterns of conversational narcissism is a fundamental skill needed for controlling it. Here are eight examples that emphasize self-importance. Available here and by RSS on October 11.
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