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 USD 19.95. Order Now! .
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More articles on Project Management:
- The Weaver's Pathway
- When projects near completion, we sometimes have difficulty letting go. We want what we've made to be
perfect, sometimes beyond the real needs of customers. Comfort with imperfection can help us meet budget
and schedule targets.
- Long-Loop Conversations: Clearing the Fog
- In virtual or global teams, conversations can be long, painful affairs. Settling issues and clearing
misunderstandings can take weeks instead of days, or days instead of hours. Here are some techniques
that ease the way to mutual agreement and understanding.
- Scope Creep, Hot Hands, and the Illusion of Control
- Despite our awareness of scope creep's dangerous effects on projects and other efforts, we seem unable
to prevent it. Two cognitive biases — the "hot hand fallacy" and "the illusion
of control" — might provide explanations.
- Why Scope Expands: I
- Scope creep is depressingly familiar. Its anti-partner, spontaneous and stealthy scope contraction,
has no accepted name, and is rarely seen. Why?
- Irrational Deadlines
- Some deadlines are so unrealistic that from the outset we know we'll never meet them. Yet we keep setting
(and accepting) irrational deadlines. Why does this happen?
Forthcoming issues of Point Lookout
- Coming October 17: Overt Belligerence in Meetings
- Some meetings lose their way in vain attempts to mollify a belligerent participant who simply will not be mollified. Here's one scenario that fits this pattern. Available here and by RSS on October 17.
- And on October 24: Conversation Irritants: I
- Conversations at work can be frustrating even when everyone tries to be polite, clear, and unambiguous. But some people actually try to be nasty, unclear, and ambiguous. Here's Part I of a small collection of their techniques. Available here and by RSS on October 24.
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- The Power Affect: How We Express Our Personal Power
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