We began our catalog of risk management strategies last time, exploring Denial, Shock, Acceptance, and Chaos. None of those four are particularly effective with respect to achieving our goals in the context of adversity. One more ineffective strategy remains to be explored before we examine some more effective approaches.
- This strategy, usually executed unconsciously, involves repeated delay of planning to address acknowledged risks. We just can't seem to find time to sit down and plan for risks.
- Slogan: "Yes, we have to plan for that risk, but we're too busy right now. Maybe tomorrow."
- Advantage: Deferring planning enables the procrastinator to defer acknowledging the cost of managing risk, which can be helpful in persuading decision-makers to undertake or continue the effort, because its full cost is unrecognized. Procrastinating also enables the procrastinator to claim that planning is "in progress" when actually it isn't.
- Danger: Procrastinating leads to a perception that the resources at hand are sufficient, when they might be wholly inadequate. It can also lead to delays so great that the organization can become unable to prepare for the risk prior to the actual risk event.
Let's look now at strategies that actually facilitate progress.
- Avoidance is the choice to eliminate the possibility of loss by changing what you're doing. Other losses might happen, but not that one. For example, if we include an overview of the Marigold project in our presentation, we risk being asked about Issue 18, for which we have no answers yet. To avoid that risk, we decide not to provide a general overview of Marigold. Instead we'll discuss only Issue 17, which is almost resolved.
- Slogan: "If we use this other design instead, we can avoid that risk."
- Advantage: Finding Sometimes we can be so averse
to risk that we convince ourselves
that a risk-avoiding alternative
approach can achieve our goals,
when it actually cannota clever alternative to what we planned originally, and thereby avoiding a risk we would have borne under the original approach, can be both elegant and effective.
- Danger: Sometimes we can be so averse to risk that we convince ourselves that a risk-avoiding alternative approach can achieve our goals, when it actually cannot.
- Limitation strategies reduce the probability of the risk event occurring, or reduce the size of the loss if it does occur, or both. Using limitation, we make the risk acceptable by reducing the expected value of the loss.
- Slogan: "We can reduce the probability of that risk (or the cost of that risk) if we do this."
- Advantage: The expected value of the loss associated with a risk event is the product PV, where P is the probability of the occurrence and V is the value lost. If we can reduce the expected value enough, we can proceed with confidence, even if the risk event occurs.
- Danger: Estimating probabilities is notoriously difficult. If we're wrong in our estimates, and the risk event occurs, we could be in trouble.
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! .
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More articles on Project Management:
- Start a Project Nursery
- In a Project Nursery, professionals from across the entire organization collaborate to conceive of new
projects. When all organizational elements help decide which projects to investigate, the menu they
develop best suits organizational needs and capabilities.
- Finger Puzzles and "Common Sense"
- Working on complex projects, we often face a choice between "just do it" and "wait, let's
think this through first." Choosing to just do it can seem to be the shortest path to the goal,
but it rarely is. It's an example of a Finger Puzzle.
- Flanking Maneuvers
- Historically, military logistics practice has provided a steady stream of innovations to many fields,
including project management. But project managers can learn even more if we investigate battlefield tactics.
- 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?
- 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.
Forthcoming issues of Point Lookout
- Coming October 16: Performance Mismanagement Systems: II
- One of the more counter-effective strategies incorporated into performance management systems is the enterprise-wide uniform quota, known as a vitality curve. Its fundamental injustice breeds cynicism, performance fraud, and toxic conflict. It produces performance assessments that are unrelated to enterprise objectives. Available here and by RSS on October 16.
- And on October 23: Power Distance and Teams
- One of the attributes of team cultures is something called power distance, which is a measure of the overall comfort people have with inequality in the distribution of power. Power distance can determine how well a team performs when executing high-risk projects. Available here and by RSS on October 23.
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- The Race to the South Pole: Lessons in Leadership
On 14 December 1911, four men led by Roald Amundsen reached the South Pole. Thirty-five days later, Robert F. Scott and four others followed. Amundsen had won the race to the pole. Amundsen's party returned to base on 26 January 1912. Scott's party perished. As historical drama, why this happened is interesting enough. But to organizational leaders, business analysts, project sponsors, and project managers, the story is fascinating. We'll use the history of this event to explore lessons in leadership and its application to organizational efforts. A fascinating and refreshing look at leadership from the vantage point of history. Read more about this program.
Here's a date for this program:
- Baldwin-Wallace University, 275 Eastland Road, Berea, Ohio
44017: November 7,
Kerzner Lecture Series/International Project Management Day, sponsored by Baldwin Wallace University and the Northeast Ohio Chapter of the Project Management Institute.
- Baldwin-Wallace University, 275 Eastland Road, Berea, Ohio 44017: November 7, Kerzner Lecture Series/International Project Management Day, sponsored by Baldwin Wallace University and the Northeast Ohio Chapter of the Project Management Institute. Register now.
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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.