Not risk And Resilience, But risk OR Resilience

 

I can assure GTIM Nation that I am not bribing Cameron to set monthly ProjectManagement.com themes to areas where I get to get up on my favorite soap boxes, even though the current theme of risk (no initial caps) and Resilience would seem to argue to the contrary. Back when I was writing the Variance Threshold column for PMNetwork magazine, I created something of a PM firestorm in 2007 with a piece entitled “PMBOK, Shmimbok”, where I walked through the (then-) sections of the PMBOK Guide®, and commented on whether or not I thought they should be included. After arguing for the inclusion of Scope, Cost, and Schedule, I (ironically) also supported the risk management (no initial caps) section, on the grounds that the risk events were being quantified in terms of cost or schedule impact on the baseline. And that’s when the fireworks started.

Some risk management specialists took extreme umbrage with my failing to identify “opportunity” as a “type” of risk, and asserting that it could be managed similarly. One or two of them sent emails to PMI® demanding my firing. My response to them was to point out that when looking up the word “risk,” out of Webster’s Third International, the Oxford English Dictionary, and even Wikipedia, none of them included the word “opportunity” in their definitions. It was at that point that I began to realize that risk management’s theoretical underpinnings were far weaker than I had previously perceived, and I started to perform some thought experiments using commonly-used risk analysis techniques on historical events. My favorite was the sinking of the Titanic.

Consider that, had a modern-day risk manager with no knowledge of Titanic’s fate been asked to calculate the odds, prior to embarking, that she would strike an iceberg and sink, the result would have almost certainly been miniscule. The North Atlantic is very big. The iceberg that sank the Titanic was not. And, even if such a risk manager were to calculate the odds of striking a 200-to-400-foot wide obstacle[i] in the middle of the 16,000,000 square-mile North Atlantic, the ship’s ability to navigate around mid-ocean obstacles would have reduced even that number to almost nothing, and doubtless too small to raise concerns.

So here is where we get into some really interesting risk management word play. The calculated odds of Titanic hitting an iceberg and sinking prior to her leaving Queenstown would have been extremely remote. Once she had hit, and four of her watertight sections began flooding, the “odds” would have moved all the way to 1.00, or certainty. Of course, the odds all along were 1.00, since that is what actually happened, but there would have been no reasonable way for our intrepid risk manager to have known that prior to the great ship leaving Ireland. Now let’s suppose our risk manager had near complete knowledge of all of the relevant parameters, including the existence of the iceberg, its course and speed (uneven as it must have been), Titanic’s precise location at every point along the trip, the lack of binoculars for the lookouts, the data on her poor turning behavior and inability to withstand damage to more than four watertight compartments before being doomed, the precise reactions and behaviors of the crew, etc., etc., all prior to her leaving Queenstown. With such knowledge, it may have been possible to calculate the odds of the disaster unfolding as it did to the point of over 50%, informing a life-saving decision to change course and/or slow down prior to 11:35 p.m. on April 14. Let’s theorize a data scale, with the information available in the real world (that resulted in the decisions that led to the sinking) on one end, and the information that would have had to have been available in order to push the probability meter over 50%, and point to the need for different decisions on the other. Clearly that level of accessible knowledge is impossible to attain, in 1912, today, and tomorrow. What can be known today, tomorrow, and in 1912 is that the inclusion of water-tight decks atop the watertight bulkheads would have made the Titanic more robust, and perfectly capable of surviving the iceberg strike that doomed her.

So, given the choice between heeding the advice of the risk managers (no initial caps) with their odds-of-occurrence assertions, and the insights of the more-robust-design crowd, it’s not a matter of “risk and resilience,” but risk OR resilience.

I know which set I would listen to.

[i] The estimated size of the iceberg that Titanic hit, retrieved from https://www.grunge.com/825199/does-history-reveal-how-big-the-titanics-iceberg-was/ on September 22, 2023, 18:36 MDT.