Are you making risk management mistakes - an evening with Bryan Barrow
Posted by APM on 5th May 2016
We all live in a world surrounded by risk, from simple day to day activities to the projection of a project achieving its goals. Risk affects us all and the impact it can cause can be the difference between success and failure. But are we managing the risks we take? Do we actively seek out a plan B to prepare ourselves if the initial plan begins to turn more towards failure than success?
On the 27th of April at the Royal York Hotel, Bryan Barrow, a former Chair of the APM’s Risk Management Specific Interest Group, bestowed his personal experiences and gave a seminar on managing risk and how to prepare yourself with the essential plan B.
Why manage risk? We manage risk to create less failure, to prevent the required benefits from being missed and to divert projects from being delivered late. But it is not always easy to capture risks; there are times when the unforeseen risks and circumstances are inevitable. Bryan referred to these as Black Swans and explained they have three defining features: rarity; extreme impact; and retrospective predictability. These are unlikely to happen but they still do. Yet on the other hand, “the average project schedule that overruns is 70%. 17% had a cost overrun of 200% and the average project cost overrun is 27%” (Harvard Business Review, September, 2011). Therefore, although the inevitable can sometimes happen for the majority of the time, the above can always be avoided.
Bryan suggested one of his methods to manage risk is that rather than looking at the traditional ‘time vs cost’ to look toward ‘time vs risk’ as we are trying to stop where risk becomes an issue. The reason for managing this alternation with risk instead of cost is due to the cost being likely to increase if the risk is not managed effectively. In other words, a risks impact increases in time and that impact is likely to be cost.
Another method of removing the likelihood of risk is to reflect on your previous mistakes. Bryan advised the top ten common mistakes that can be portrayed in three different segments – people, processes and publicity mistakes.
People mistakes includes:
- Not telling your team straight away
- Ignoring people risks
- Assuming the worst can’t happen
Process mistakes include:
- Not identifying specific risks
- No contingency planning
- Mistaking risks for issues (Risks are things that might go wrong, issues are what is going wrong)
- Not looking for new risks
Publicity mistakes includes:
- Not publicising risks to stakeholders
- Excluding partners from risk reviews
- Having no risk management plans whatsoever
Bryan concluded that when these mistakes are made important elements can be overlooked. If there is any data missing in the initial planning of a project there can be facts to argue that a project should not go ahead. When these facts are overlooked and the project is initiated, or further down the line when the project should have stopped and is left to carry on, there is likely to be a huge impact for the project or even the company itself.
Bryan related projects to a rocket analogy. He explained that when a rocket takes off it has so much volume of energy which is implemented purely on its launch that it would be disastrous to stop it just after start up. However, a rocket would never set off without the knowledge that it will get off the ground, and likewise a project manager with their projects.
Although, there are times when projects must be abandoned. There is no point in putting all of your resource and energy into something which is not beneficial. There are times when the projects input can affect much larger priorities. Bryan suggested the metaphor of “a few bad apples can spoil a whole barrel”, meaning that when one project turns sour it can have a knock on effect. From a portfolio perspective there were examples given of how some projects can overturn the entire company and that the usual reasons for this unforeseen turn are: poor project plans; no risk management plan; no contingency plans; no contingency budget; and no exit criteria.
When planning ahead and preparing for a plan B it can initially mean more work and time. However, it allows for a new perspective to be seen and an alternate path to be introduce if your initial route begins to be impacted. It also allows for immediate implementation rather than wasting valuable time trying to figure out a solution. One of Bryans quotes was “most projects only have a plan A, these projects are never successful because plan A never works”. Once you have alternative plans Bryan advised that the most competent way to deal with risk for those plans is to utilise your focus on prioritising its top ten risks. Once you have worked through those ten, work on the next and so on until you know the major risks have been dealt with. Bryan’s slides ended with the quote “20% of risks result in 80% of the problems, issues and delays”. Which really emphasized just how valuable risk management is and why investing time wisely in the beginning can prevent wasting more time, or even cost and quality at a later point.
Conclusively, Bryan’s dynamic and charismatic approach to risk helped him deliver an interactive seminar which could be appreciated by attendee’s with any level of knowledge on risk management. Bryan suggested multiple methodologies and strategies. For example, using index planning to deal with risk. He also used helpful metaphors to explain topics which otherwise might have been difficult to understand for people without much prior risk management knowledge. I would advise anyone to attend a future event that is being presented by Bryan. His knowledge and expertise in risk management is exceptional and his approachable personality made his presentation an enjoyable and informative event.
“Just because life is full of risks it doesn’t mean you have to be beaten by them” – Bryan Barrow
James Pearson, YNL committee member
Bryan's presentation can either be viewed below or on the APM Resources page.
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Nominations for the YNL branch committee are now closed and no further nominations can be made.