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Volume 17, Issue 44;   November 1, 2017: Risk Creep: I

Risk Creep: I

by

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?
Terminal 3 of Beijing Capital International Airport

Terminal 3 of Beijing Capital International Airport. An extraordinary number of processes must work with precision for an airline to operate "within normal parameters" for a single day. Aircraft, fuel, seating assignments, luggage, flight crew, security, and on and on. That they do as well as they do is worthy of admiration.

Early in the morning on May 27, one of Britain's busiest annual travel days, British Airways canceled all flights from London's two biggest airports. More than 1,000 flights and 75,000 passengers were affected. In a statement, the airline announced that "a major IT system failure" had disrupted flight operations worldwide. [Johnston 2017] [Dans 2017]

On September 28 "network problems" struck the firm Amadeus IT Group SA, whose Altea software "is used by more than 100 airlines worldwide," including "Air France, Southwest, Lufthansa, British Airways, Qantas, China Air and Korean Air." [Rizzo 2017] Passengers around the world reported long lines, and although the system did recover that same day, delays of hours were widespread, and many international passengers missed connections.

On that same day, in the midst of worldwide air traffic disruption, Reuters reported that the United States General Accounting Office would be investigating these disruptions and a string of others that had occurred in the previous six months. [Shepardson 2017] Fires, network outages, human error, and goodness knows what else were suspected causes.

Clearly something was not right with the airlines' management of technological risk. And since no major industry understands technological risk management better than the airlines, it's reasonable to suppose that if the airline industry is having trouble managing technological risk, just about everyone is.

However assiduously we avoid risk, we sometimes find — suddenly, as the airlines did — that we're up to our necks in it. How does this happen? How does risk creep into our projects and our operations? Let's consider projects, because they're time-limited and therefore a little less complicated.

When project champions are required to "sell" When project champions are
required to "sell" a project
internally, they sometimes overcommit
a project internally, they sometimes overcommit. If that happens because of an inordinately high bar imposed by senior management, one possible cause is a most curious phenomenon, related to what Boehm et al. call a "conspiracy of optimism" [Boehm 2016], and which is actually a variant of the n-person prisoner's dilemma. [Hamburger 1973] Specifically, senior management might be trying to manage enterprise-scale risk by requiring high returns at low risk from individual projects (or even individual portfolios of projects). Ironically, this approach results in risk elevation for the individual projects or portfolios, because project champions must promise the nearly impossible, or the outright impossible, to gain access to resources. The paradoxical result is that risk aversion on the part of senior management fosters an environment in which nearly all activities that are underway are high risk. By attempting to wring risk out of the enterprise, management opens the door and invites it in.

It gets worse. It turns out that the risks confronting individual projects, arising from the unrealistic promises of project champions, are correlated. And that means that when one risk event materializes, others will too. We'll explore how project champions contribute to risk creep next time. Go to top Top  Next issue: Risk Creep: II  Next Issue

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Footnotes

[Johnston 2017]
Chris Johnston. "British Airways cancels all flights from Gatwick and Heathrow due to IT failure," The Guardian, May 27, 2017. Available here. Retrieved 15 October 2017. Back
[Dans 2017]
Enrique Dans. "What Is Technical Debt, and Why Is British Airways Up to Its Neck In It?" Medium.com blog. Available here. Retrieved 15 October 2017. Back
[Rizzo 2017]
Cailey Rizzo. "System Outage Causes Delays and Confusion at Airports Around the World," Travel and Leisure, September 28, 2017. Available here. Retrieved 16 October 2017. Back
[Shepardson 2017]
David Shepardson. "U.S. government auditor to look into airline IT disruptions: letter," Reuters, September 28, 2017. Available here. Retrieved 15 October 2017. Back
[Boehm 2016]
Barry Boehm, Celia Chen, Kamonphop Srisopha, Reem Alfayez, and Lin Shiy. "Avoiding Non-Technical Sources of Software Maintenance Technical Debt," USC Course notes, Fall 2016. Back
[Hamburger 1973]
Henry Hamburger. "N-person Prisoner's Dilemma," Journal of Mathematical Sociology 3 (1973), 27-48. doi:10.1080/0022250X.1973.9989822. Back

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