
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 overcommita 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. Top
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Related articles
More articles on Project Management:
The Cheapest Way to Run a Project Is with Enough Resources
- Cost reduction is so common that nearly every project plan today should include budget and schedule
for several rounds of reductions. Whenever we cut costs, we risk cutting too much, so it pays to ask,
"If we do cut too much, what are the consequences?"
Resuming Projects: Team Morale
- Sometimes we cancel a project because of budgetary constraints. We reallocate its resources and scatter
its people, and we tell ourselves that the project is on hold. But resuming is often riskier, more difficult
and more expensive than we hoped. Here are some reasons why.
More Obstacles to Finding the Reasons Why
- Retrospectives — also known as lessons learned exercises or after-action reviews — sometimes
miss important insights. Here are some additions to our growing catalog of obstacles to learning.
Unresponsive Suppliers: II
- When a project depends on external suppliers for some tasks and materials, supplier performance can
affect our ability to meet deadlines. How can communication help us get what we need from unresponsive
suppliers?
The Risk of Astonishing Success
- When we experience success, we're more likely to develop overconfidence. And when the success is so
extreme as to induce astonishment, we become even more vulnerable to overconfidence. It's a real risk
of success that must be managed.
See also Project Management and Project Management for more related articles.
Forthcoming issues of Point Lookout
Coming May 14: Working with the Overconfident
- A cognitive bias known as the Overconfidence Effect causes us to overestimate the reliability of our judgments. Decisions we make based on those judgments are therefore suspect. But there are steps we can take to make our confidence levels more realistic, and thus make our decisions more reliable. Available here and by RSS on May 14.
And on May 21: Mismanaging Project Managers
- Most organizations hold project managers accountable for project performance. But they don't grant those project managers control of needed resources. Nor do they hold project sponsors or other senior managers accountable for the consequences of their actions when they interfere with project work. Here's a catalog of behaviors worth looking at. Available here and by RSS on May 21.
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