2007 Vol. 2 A Newsletter of the PMI Central Indiana Chapter June 01

Fusion Alliance
What is the 'Word'? - Risk
Kimberle Seale
Kimberle Seale, PMP, has over 14 years of IT experience and has been managing projects for 11 years, primarily in Government and Pharmaceutical industries.  Kim is currently employed as a Quality Assurance Manager at Fusion Alliance where her Project Management, Quality, Communication, and Process Management skills are utilized everyday.  Fusion Alliance specializes in the art of technology consulting helping clients realize their business goals through the integration and implementation of technology-based solutions.  
What is “The Word”?  Risk.   Wikipedia defines risk as “…a concept that denotes a potential negative impact to an asset or some characteristic of value that may arise from some present process or future event.”  PMBOK defines risk as “an uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives.” Many Project Managers take a laissez-faire approach to Risk Management.  I admit I was once in that mind set until I studied a book written by Rita Mulcahy.  Rita takes a common sense approach to teaching Risk Management in her book Risk Management, Tricks of the Trade® for Project Managers.  After studying this book, my perspective on Risk Management has entirely changed.  The approach is very structured and deliberate, and when taken from the beginning to the end of a project, many of the issues the Project Manager encounters will never occur. Let’s take an example that I think most can relate to, “A family get-together that involves the Mother-In-Law.”  I have my own risk list in my head that I must manage during Thanksgiving Day.  Rita teaches in her book a way to describe a risk in the most effective manner.  It’s depicted as a Cause-Risk-Effect sentence structure.  Structuring the risk in this fashion helps all involved to understand what scenario would have to occur for the risk to become an issue and what the resulting effect would be if it did occur.  Let’s use this risk example from my Thanksgiving Day. 
(Cause) If my Mom tells my husband that he hasn’t cooked the turkey long enough in the oven,
(Risk) my husband may lose his temper with her,
(Effect) causing my Mom to not speak to him for the rest of the day.
 As I quoted from PMBOK above, risks have a positive or negative effect.  Some may think this would be a positive effect for my husband but not for my Mom.  For the sake of this discussion, we will examine the negative effect. The warning sign (or trigger) that this risk may become an issue would be if my Mom would come into the kitchen.  If I analyze the likelihood of this occurring, the probability is high based on the location of the kitchen.  This lets me know that I need to watch closely for the warning sign. My risk management response strategy could be one or more of the following:  acceptance; transference; avoidance; or mitigation.  Let’s evaluate these options: 
  1. If I accept the effect, this just won’t be good for anyone.  Not an acceptable response strategy.
  2. If I try to transfer the effect to a third party… this won’t work either.
  3. If I try to avoid the effect, one option would be to not invite my Mother over for Thanksgiving Day. This is not an option.  Another option is I could be the one who cooks on Thanksgiving Day and my husband would be disappointed if he didn’t get to cook.  This is not an option either.
  4. The last response strategy would be to mitigate.  What could I do to minimize the possibility of this risk occurring?  One option would be to enlist my sister and my daughters to engage my Mother in a game that is long enough to keep her occupied.  Now, that will work.
 What is expected from “The Word”? Risk.  As many say, “hind site is 20/20”.  How many times have you heard a Project Manager wishing they had been more prepared for some of the issues they ran into on their project?  How much time, money, and stress would they have saved if they had diverted their energy to Risk Management vs. Issue Resolution? Do you have the right mind-set? If you are not currently practicing effective Risk Management practices, try tweaking your approach a little until you are comfortable with how risk is managed on your project.  Read Rita’s book.  Create a template that is easy to use.  Rita mentions in her book, many project risks are common across projects.  Start with those.  They could be reusable from one project to the next.   There are many possible ways to approach Risk Management; just do what works best for your environment.  Don’t wait until an issue arises and realize that you should have managed risk better.  And that’s “The Word”.