On Friday 16 September 2011 around 50 delegates from a wide range of industry sectors came together for a full day to discuss Risk Management in the Council Chamber of the Old Fire Station venue at the University of Salford. The event was prompted by a survey of the Project Management Subject Groups members in 2010 which rated Risk Management as one of the top 3 subjects they would like to hear more about.
The Salford event was jointly organised by PMSG and the North-West Branch of the Association for Project Management, this being the third collaborative seminar hosted by the two organisations. The previous two both concerned Cost Estimating and were held in the North West in 2008 and subsequently in central London last year.
The scene for the days proceedings were set by Paul Davies of Lloyds Register whose contention was that Risk is not the same for everyone with hard definitions being preferred by mathematicians & scientists compared to a softer approach used by psychologists and social scientists. Paul also proposed outrage as another risk function rather than just the simple likelihood x consequence approach.
Presentations by James Kimmance of Parsons Brinckerhoff and Mike Ward of Outperform considered how to persuade organisations to adopt risk management from project outset taking into account project context, culture and the resources available. Mike, who is the current chair of the APM NW Branch and was supported by colleague John Humphries, used recent work with a rehabilitation hospital in Riyadh as a case study.
Jim Yates of Fulcrum Management considered the extent to which the risk management techniques traditionally applied to single projects are applicable in multi-project environments. Jim examined how the risk, uncertainty and contingency should be allocated between the programme manager and the individual project managers. The key conclusion was that Risk Management funding should be held at the highest level with individual project managers providing submissions for draw down on the funds as appropriate.
Kevin Kane of Salford University discussed the relevance of quantitative risk techniques in the context of project managers apparent preference for qualitative approaches that were seen as more suitable in project management contexts. This preference for quick and easy deterministic estimates over theoretical and difficult to calculate probabilistic estimates of time and costs, was described as being dated and an artefact of costly and difficult to use modelling software. Newer technologies make it cheap and easy to produce more valid and useful estimates.
To make sure the delegates remained alert after lunch some 10 teams got down to some serious work using LEGO construction blocks to illustrate a key risk factor the initial project brief. The teams were asked to design a model of their own choosing, write a suitable specification for it & hand this to a selected contractor [ another team ] for construction. Most of the models constructed to the written specs were certainly recognisable when compared to the originals all that project management training has obviously not been wasted ! Prizes for best model and best specification [ not necessarily the same thing ] were awarded by independent judges.
The day concluded with a presentation by Richard Kirkham of Manchester University reflecting on the effect of project complexity on Risk Management. The presentation explored the importance of understanding psychology and decision-theories in the context of the current APM and PMI bodies of knowledge. The discovery of a $1.3 billion loss at UBS by a rogue trader on the day of the presentation provided a timely reminder of Risk Management failure !
Informal feedback from delegates during the event suggested that they would go away with some useful Risk Management tips and thoughts and, hopefully, keen to introduce these to their own projects.
Phil Hardy & Kevin Kane