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Risk Management: A Topo Map of the Future

Posted by Jeannette Cabanis-Brewin

Jeannette Cabanis-Brewin is editor-in-chief for PM Solutions Research, and the author, co-author and editor of over twenty books on project management, including the 2007 PMI Literature Award winner, The AMA Handbook of Project Management, Second Edition.

An Interview with Senior Instructor Bill Athayde.

The PM College instructors are a fascinating group of people. Because they spend most of their days working with classes on client sites, they get an inside view of the workings of many companies, in a variety of industries. And because they are teachers, they value learning and are continuously scanning the environment to improve their grasp of the issues that impact project management. We thought it was time to check in with them to see what was capturing their attention, and share it with you. This is the first of three interviews; today we chat with Senior Instructor Bill Athayde.


Q: When I asked you what issues you’d like to have the podium to discuss, you immediately said Risk Management. Why does this particular aspect of PM seem like it requires special attention today?
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A: I always ask my classes about how they manage risk, and I am always astonished at how little it’s done and, when done, how short the list of risks is that they are watching out for. Many companies don’t use risk registers, or when they do, it’s a “once and done” approach. They haven’t incorporated the awareness of risk into the culture.

Q: How do you do that?

A: I have always advised to assign each risk to someone on the team and have that person play close attention to it. New project managers don’t always realize it’s “delegate, delegate, delegate.” Then, in status meetings, you can briefly take stock of the risk situation by checking in with each person responsible for a risk: What happened? What was done about it? What’s on the horizon?

It’s a continuous process; the risk environment is always changing. When you highlight the risks in meetings this way, everyone is actually watching out for them, not just one person. So there’s a better chance of catching problems early.

I also recommend using the “5 Questions” email template that I proposed in my chapter on Risk Management in our Project Management Essentials textbook (see Chapter 6):
 

  1. What happened?
  2. What did the project plan say to do about it?
  3. What was actually done?
  4. How did the action taken work?
  5. What are the recommendations for next time?


If a risk occurs, this email can be generated with very brief answers and provide a basis for lessons learned. Another interesting thing I’ve found is that, a year later, those who had answered even these five simple questions could tell me all kinds of things about that risk event. Just the act of writing things down cements those memories … even of aspects they did not specifically write about.

Q: What are some of the biggest gaps in risk management that your students report?

A: I’m always so astonished that a company can run a million-dollar project and have a risk register with only twenty items on it. Really? Things happen! People get sick, the weather causes issues, regulations change or the supply chain gets disrupted … the things that create havoc on a project are often simply things that no one bothered to think about.

Then there are what I call “killer risks.” These are things that are a low probability, but if they happen, the impact is huge. Something, for example, that puts your company name in a negative headline on page one of the Wall St. Journal. Often because these are unlikely, they fall off the radar. Yet, I’d argue that, instead of having the usual 9-block matrix rating risks on likelihood and impact, there should be another column for the “Very High Impact” risks, just to keep an eye out for them.

The biggest weaknesses in risk management in companies today are a lack of root cause analysis, and no real knowledge management around lessons learned. Especially in companies with no PMO, there’s often no accessible library of lessons learned. Project managers don’t know where to look for things, or don’t ask the right questions to retrieve the right information.

Q: Sounds like a knowledge management failure. Is that due to software? Mindset?

A: All of the above. Various kinds of collaborative software improve access but it still requires the application of organizational skills. Companies should identify formal categories for lessons or risks, so that by use of a drop down menu, you can find all the related types of project issues. I think most project managers and PMO leaders know this, but you run into “not enough people, not enough time.”

When project managers find themselves doing the knowledge management themselves, there’s just too much going on. A lot of management doesn’t see if as valuable. Until of course, they fall off the cliff.

Again, in the Risk Management chapter in the PME book, I use the metaphor of having a topo map. Unlike GPS, it doesn’t just tell you where to turn now, it shows you all the terrain ahead: you know where the bogs are, where the cliffs are, where the river is wide or narrow. Knowing what might happen allows us to plan around it.

Giving decisionmakers more complete information is a key responsibility and value that comes from risk management. Essentially, risk management is a business skill – not just a project management skill!

Q: What resources can you steer readers to, apart from the PME book? Where do you glean information about risk management trends?

I use a lot of different inputs, including my experience in the Coast Guard and emergency response (probably going back to Boy Scout days!), plus my Myers Briggs ENTJ preference to search for global/systemic solutions to any situation (including risk). 

I also read trade pubs dealing with legal and maritime industries and those frequently address various risks encountered in business operations or projects.

Max Wideman has published good materials about project risk management. I also refer to the PMI Practice Standard for Project Risk Management and the PMBOK for insights on how they have organized thoughts around the subject.

Another source that I use is the PMI Virtual Library for articles like "Enhanced Risk Assessment Matrix for the Management of Project Risks," by Jamie P. Monat, c. 2012

I get some info from articles created by law firms, such as:  Building  A Proactive Risk Management Program.

Insurance organizations like Zurich regularly publish “awareness” pieces and those sometimes provide interesting examples and/or statistics to share in the classroom.

Risky business? Check out PM College training options for better risk management.

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