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! .
Your comments are welcomeWould you like to see your comments posted here? rbrenmhXARWRMUvVyOdHlner@ChacxgDmtwOKrxnripPCoCanyon.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.
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.
More articles on Project Management:
- Films Not About Project Teams: I
- Here's part one of a list of films and videos about project teams that weren't necessarily meant to
be about project teams. Most are available to borrow from the public library, and all are great fun.
- The 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?
- Mitigating Risk Resistance Risk
- Project managers are responsible for managing risks, but they're often stymied by insufficient resources.
Here's a proposal for making risk management more effective at an organizational scale.
- Ten Approaches to Managing Project Risks: I
- Risk management usually entails coping with losses if they do occur. Here's Part I of a concise summary
of the options for managing risk.
- How We Waste Time: I
- Time is the one workplace resource that's evenly distributed. Everyone gets exactly the same share,
but some use it more wisely than others. Here's Part I of a little catalog of ways we waste time.
Forthcoming issues of Point Lookout
- Coming June 26: Appearance Antipatterns: I
- Appearances can be deceiving. Just as we can misinterpret the actions and motivations of others, others can misinterpret our own actions and motivations. But we can take steps to limit these effects. Available here and by RSS on June 26.
- And on July 3: Appearance Antipatterns: II
- When we make decisions based on appearance we risk making errors. We create hostile work environments, disappoint our customers, and create inefficient processes. Maintaining congruence between the appearance and the substance of things can help. Available here and by RSS on July 3.
I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenmhXARWRMUvVyOdHlner@ChacxgDmtwOKrxnripPCoCanyon.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, USD 11.95)
- Get 2003-4 in Why Dogs Wag (PDF, USD 11.95)
- Get 2005-6 in Loopy Things We Do (PDF, USD 11.95)
- Get 2007-8 in Things We Believe That Maybe Aren't So True (PDF, USD 11.95)
- Get 2009-10 in The Questions Not Asked (PDF, USD 11.95)
- Get all of the first twelve years (2001-2012) in The Collected Issues of Point Lookout (PDF, USD 28.99)
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 words in your inbox in one hour. License any article from this Web site. More info
- 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.