The events of 9/11 changed the way the world, organizations, and professionals looked at risk management…be it at the enterprise level or at program/project management levels.
Subject Matter Experts began looking for algorithms that could help organizations observe tons of data and draw risk-related conclusions from them. We have various sophisticated software that addresses this aspect of the business.
Most available literature on risk management discuss risk management approach in terms of:
• Risk Identification
• Qualitative Risk Analysis
• Quantitative Risk Analysis
• Risk Response Planning and
• Risk Control
Prominent project management bodies including the Project Management Institute (USA), Association for Project Management (UK), and International Project Management Association (Switzerland) adopt a more or less the above approach to risk management.
Business enterprises have adopted standard templates to implement the above risk management processes. Companies have invested in training its project professionals to understand and use processes, and templates.
Yet, organizations and business leaders struggle to proactively identify risks in a comprehensive manner. There are numerous reasons behind this issue, some of which include the conceptual understanding itself.
Let us consider an example.
Assume you are the project manager on a six-month project that is currently in month one. One of your team members informs you that s/he is getting married and would not be available for 2weeks in month 4 of the project.
Would this be a risk?
Did you say, ‘Yes’?
Then you have company! Many professionals feel the same way. However, look at the statement again and think hard! When would you classify a situation as risk…only when there is a probability of the event either happening or not?
In this case, what is the probability? Isn’t it 100%?
[Of course, God forbid something untoward happens either to the bride or the groom ?]
Coming back to the original point, you see how an event is wrongly categorized as a risk? This creates a cascading effect on the overall process of risk management.
By the way, this was not the reason why I chose this topic.
The bigger and hidden risk that organizations face and yet don’t realize is with their hiring!
Yes, you read it right! HIRING!
Every organization wants to hire from the best universities, business schools and engineering colleges. Whether we like it or not, Recruitment Managers look for candidates with an impeccable academic record. They look for people who have been toppers and successful all through their academic life.
Are you thinking…So what?
Now let me cite a real case study at NASA’s Jet Propulsion Laboratory or JPL. On one of their critical space missions, the biggest challenge the project director faced was to “convince people about risk…the risk that something could fail!”
You might wonder, “what is so great about it?”
The project director elaborates in the case study that those who were selected for the prestigious project were all toppers from the best universities in the world who had not seen failure in academic life! These superstars could not digest the fact that their effort could sometimes not work at all!
It took a lot of time and effort to convince these “superstars” that things could go wrong and they better start thinking of risks!
Do you have such superstars in your organization?