Ten Approaches to Managing Project Risks: II

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.

Procrastination

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

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

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.

We'll continue next time with the last three of our risk management strategies. First in this series  Next in this series  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

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:

Scheduling as Risk Management

When we schedule a complex project, we balance logical order, resource constraints, and even politics. Here are some techniques for using scheduling to manage risk and reduce costs.

Long-Loop Conversations: Asking Questions

In virtual or global teams, where remote collaboration is the rule, waiting for the answer to a simple question can take a day or more. And when the response finally arrives, it's often just another question. Here are some suggestions for framing questions that are clear enough to get answers quickly.

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.

Ten Approaches to Managing Project Risks: III

Project risk management strategies are numerous, but these ten strategies are among the most common. Here are the last three of the ten strategies in this little catalog.

Risk Creep: I

Risk creep is a term that describes the insidious and unrecognized increase in risk that occurs despite our every effort to mitigate risk or avoid it altogether. What are the dominant sources of risk creep?

See also Project Management and Devious Political Tactics for more related articles.

Forthcoming issues of Point Lookout

Coming April 21: Choice-Supportive Bias

Choice-supportive bias is a cognitive bias that causes us to evaluate our past choices as more fitting than they actually were. The erroneous judgments it produces can be especially costly to organizations interested in improving decision processes. Available here and by RSS on April 21.

And on April 28: The Self-Explanation Effect

In the learning context, self-explanation is the act of explaining to oneself what one is learning. Self-explanation has been shown to increase the rate of acquiring mastery. The mystery is why we don't structure knowledge work to exploit this phenomenon. Available here and by RSS on April 28.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenGBFYqdeDxZESDSsjner@ChacmtFQZGrwOdySPdSsoCanyon.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.
   

Bullet Points: Mastery or Madness?

Decision-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.