The Impact of Unforeseen Risks

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By Conrado Morlan

Risk identification is one of the first tasks many project managers tackle when they’re assigned a new project. But identifying risks can’t be a one-time effort.

The risk log is a living document that needs to be scrubbed and updated on a regular basis. Future internal or external factors can always impact the project.

And while it may be natural to think of risks as negative, that’s not always the case. Risks can also present opportunities that uncover new project benefits or enhance the benefits that were originally defined.

Here are a few examples of risks—and opportunities—that emerged during a project and took me by surprise.

Force Majeure: The Eruptions of Eyjafjallajökull

The eruptions of Eyjafjallajökull in Iceland caused enormous disruption to air transportation across western and northern Europe in 2010.

While much of the media focused on air travel, freight-transport customers around the world also experienced parcel delivery delays.

At the time, I was deploying a regional project across the Americas for a global logistics firm. The project was put on hold so all employees could support the emergency effort to deliver parcels during the crisis.

The response plan rerouted flights originally scheduled for the hub in Germany to several cities in Italy where parcels were then transported via ground vehicles. And customer service representatives increased communication with customers about their shipment’s status.

In the end, the logistics company didn’t lose any customers and, in fact, many customers were pleased with how the force majeure was handled. The company also demonstrated to the customer the company’s effective emergency plan for crisis situations.

While this unforeseen risk delayed the regional project I was working on, I kept the project stakeholders informed frequently of the project team activities throughout the crisis and shared the actions to be taken to bring the project back on track.

Geopolitical Events: Fidel Castro’s Death

In December 2015, the United States and Cuba agreed to re-establish regularly scheduled flights, allowing selected U.S. airlines daily trips between the two countries.

During the first quarter of 2016, those airlines were launching projects to open new services to one or more destinations in Cuba. It was a daunting job. The projects would need to comply with U.S. and Cuban regulations. And information was not flowing rapidly between the two countries.

The airline I was supporting was awarded three Cuban destinations. But in November, while we were finalizing details for the first flight to Havana, we learned about Fidel Castro’s death.

During the mourning period, all communications with Cuban government officials and agencies were suspended. Trips airline employees working on the project had planned to take to Cuba were canceled.

The project team was uncertain what this delay would mean for the first scheduled flights to Havana. To address the potential risk, different scenarios that included the postponement and cancelation of flights were defined and mitigation plans were drafted for potential implementation.

After the mourning period, communications were restored and project activities normalized. Ultimately, the geopolitical event did not impact the scheduled flights, but it was a risk that could not have been anticipated.

As a project manager, what unforeseen risks have impacted your projects? How did you address and mitigate those risks?

Posted by Conrado Morlan on: January 31, 2017 03:05 PM | Permalink

Comments (7)

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Greetings,

Very nice article with practical case studies regarding risks.

In my own experience, I worked on a project developing a Data Acquisition software to communicate via serial port with a machine. As we could not move the machine to our lab, we enacted a set of sessions with the machine and saved the requests and responses data, which later we fed into a serial communication simulator to conduct the development of the system. When the software was ready, it failed to communicate with the actual machine upon deployment, even though tests with the serial port simulator were successful. At the end, it resulted that communication speed between the software and the simulator was faster than the communication speed with the actual machine, so after tuning the software to wait for communication from the machine, finally the deployment was successful.

We thought that developing the system against the serial communication simulator could mitigate the risk of not been able to use the actual machine in the software development process; but we did not foresee the risk of the simulated environment to behave slightly different than the actual machine!

Excellent ..

In a construction contract the impact of unforeseen risks(force majeure/foreclosure/insolvency) to the Contractor is practically impossible to ascertain accurately .In a competitive market any buffer available under contingencies may not be adequate to absorb the damage that such risks may inflict.

Like in database management system, we work with all the minor cases that can make disk failure, so that we can recover all the data. Similarly, we should consider all the risks that create problem for us.

Thanks
Ajay Mishra
Webworld Experts Reviews



Thanks for bringing up positive Risk. As you said,opportunities can present themselves from unforeseen risks.

Thanks for sharing

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