Viewing Posts by Mario Trentim
In my last post, I discussed the importance of getting risk identification right. Now, it’s time to tackle the challenge of qualitative risk analysis—which project practitioners often tend to confuse with subjective analysis.
Objective vs. Subjective Analysis
Subjective analysis is based on personal opinions, interpretation, points of view, emotions and judgment. It is often ill-suited for decision making and, in particular, for risk analysis.
Objective analysis is fact-based, measurable and observable. For qualitative risk analysis that means using scales to evaluate risk, whether textual (low, medium, high), color-coded (green, yellow, red) or numeric (from 1 to 5), or some combination of these.
Getting Qualitative Risk Analysis Right
Consider this all-to-common scenario: In a project team meeting to assess risks, the only available information is the risk name and the words high, medium and low. Because there is no definition on what high, medium and low mean, and because there is not enough information about individual risks, the risk analysis is based on guesses.
So how can project practitioners stop the guessing game and ensure objectivity? Here are seven tips:
1. Consult tools and standards: Qualitative analysis tools are mentioned not only in PMI’s A Guide to the Project Management Body of Knowledge (PMBOK® Guide) but also in PMI’s Practice Standard for Risk Management. For more risk management reference material, check ISO 31000:2009 and ISO 17666:2003.
2. Define qualitative scales in the risk management plan: The Committee of Sponsoring Organizations of the Treadway Commission’s Risk Assessment in Practice has created some good examples of what impact and probability scales could look like. (See pages 4 and 5). You may also want to check the Project Risk Management Handbook: A Scalable Approach (page 20).
3. Gather and document information about identified risks: Interview and involve relevant stakeholders, review lessons learned, document assumptions and information for each risk.
4. Adopt expert opinion, whenever possible: Get a second opinion from more experienced project managers, project management office leaders and other internal experts. If you are not familiar enough with risk identification and analysis for a particular project, hire external experts or consultants.
5. Consider using a risk breakdown structure: Grouping risks in categories helps in identifying root causes and in developing effective responses.
6. Assess probability, impact and urgency for individual risks: Investigate the likelihood of occurrence for each specific risk and its potential effect on project objectives (scope, schedule, cost), documenting the results according to the predefined qualitative scale levels.
7. Prioritize risks using the probability and impact matrix: Rate risks and develop your final probability and impact matrix to determine the need for further quantitative analysis and to plan for risk responses.
Adopting a well-defined qualitative scale and carefully assessing risk data and information will help your team perform better risk analyses. Do you agree with that? Please share your comments and experience.
While uncertainty can influence project outcomes, contingency and proper risk response planning can decrease the potential sting. But, despite the rich theoretical background and defined best practices that have been developed for risk management, it remains a struggle for most organizations and project managers.
Why? Here are three reasons I often see:
Effectively Identifying Risks
Risk identification demands effort and time. It is easy to overlook risks in the first pass. That’s why it should be reviewed periodically throughout the entire project life cycle.
According to Rita Mulcahy in her book Risk Management, Tricks of the Trade, if you identified less than 300 project risks, you did a poor identification. To identify more risks (and exceed Ms. Mulachy’s target) try these three tips:
1) Review all documentation, including:
2) Utilize various information-gathering techniques:
3) Try different diagramming techniques, such as:
How familiar are you with these tools? Which do you find the most useful? Is there another you would recommend? I look forward to your comments!
Ever heard this joke? “You don’t need superpowers to change an organization. You only need one project manager—but the stakeholders must want to change.”
In this post, I want to remind you to put yourself in your stakeholders’ shoes. As you think about the changes to be delivered by your project, take their different perspectives seriously.
If you ask most people about their attitude toward change, they give answers trying to show how flexible and adaptable they are. After all, nobody wants to play the naysayer role. We don't want to be seen as resistors.
For example, I once asked my MBA students if they like change. They cheerfully answered "Yes!", to which I promptly answered "Fine, let's extend our class by five hours. Moreover, I want you to read seven papers and two books by the end of next week so that you can take a four-hour exam."
It’s easy to prove the point that we don't like bad changes. But what about good changes, the ones that benefit us? Do we really even want a change that’s good for us?
In reality, our behavior and attitudes often contradict what we believe. Why? Because we are afraid, and our expectations and interests are different and changing. Our relationship to specific changes isn’t static.
The biggest issue is that organizations (and project leaders) don’t always present planned changes in ways that makes it easy for people to answer the most important question: “What’s in it for me?”
I sometimes hear project managers complaining about their stakeholders. They say, “stakeholder X always changes his mind,” or “stakeholder Y creates obstacles to my project,” and so on.
Wake up! Stakeholders are not the problem. The truth is that your project is the problem. After all, what is a project?
From its definition, a project is a temporary endeavor to create a unique result. So, your project will create something that didn't exist before, something that wasn't there.
A project is a disturbance in the environment.
As a functional manager, for example, I will have to give up my status quo. I would be “forced” by your project to learn how to use the new enterprise resource planning system that you want to install. Do you really think I would help you? Is the functional manager the problem? No.
As a project manager, your job is to convince stakeholders they are going to benefit from the outcome. Show them what they will earn. If you fail, they won't help. As long as your stakeholders are not happy, your project is doomed to fail.
Want to learn more? Check out the webinar Managing Stakeholders as Clients. And, please, leave your comments!
I recently delivered a webinar at ProjectManagement.com on how to effectively define a project management office’s business model, functions and structure (watch the recording here).
In that presentation, I wanted to start a discussion on different modern approaches to defining and implementing PMOs. Today, I’m going to share some thoughts and examples on how to do that in practice.
A step-by-step process to define and implement a PMO helps to build buy-in. The following five phases lay out a learning process in which stakeholders are identified and engaged to discuss and develop a PMO model that best suits their organizational needs.
Phase 1: Assessment
Understand the organizational context and assess current project management practices and maturity levels. The as-is situation involves processes mapping and the use of maturity models, such as OPM3®.
Phase 2: Definition
Once the current situation (as is) is described in detail, explore the future desired situation (to be). The Business Model Generation helps in defining the ideal solution for a desired PMO model. The gap analysis between current and desired situations will guide the implementation plan.
This phase also includes defining the following aspects of the PMO:
Mandate: mission and vision
Business model: customers and value proposition
Structure and functions: processes, resources and partnerships
Phase 3: Implementation
This is not easy. It involves a lot of change management and stakeholder management. A phased approach to the implementation is recommended, especially for large endeavors.
You might want to implement a pilot PMO in a region or department before rolling it out to the entire organization. The implementation work packages will depend on the PMO definition. Deliverables might include: training, software, processes, methodology, templates and more.
Phase 4: Continuous Improvement
The PMO is an entity that must deliver business value. Its mission is not to help individual projects thrive but to boost the entire organization’s performance through best practices and governance.
As the organization changes and matures, so does the PMO. It should be a flexible and adaptable structure to accommodate new project management challenges ahead.
A continuous improvement plan may include a maturity-growing roadmap and regular assessment of PMO functions and KPIs to guarantee that it is always reinventing itself before it turns out to be obsolete.
Phase 5: Closeout
The closeout phase should include a celebration of the PMO results, emphasizing its mandate, to engage stakeholders and keep buy-in.
The main lesson: always involve and engage stakeholders properly. Keep in mind that a PMO is an organizational structure that should create value, distribute value and capture value. The Business Model Generation helps to identify what value is for the stakeholders (customer segments/value proposition), which drives the PMO functions and structure.
Example of a PMO Business Model
Of course, you may have other ideas for PMO business models. What are your PMO’s customers? Value proposition? Functions? Share your comments, thoughts and suggestions below.
Daniel Kahneman, Nobel laureate in behavioral economics and author of Thinking, Fast and Slow, has written about how people tend to make decisions based on the potential value of losses and gains rather than the final outcome. Considering our common cognitive and emotional biases, how can we cope with daily ethics challenges with integrity?
We humans are in some ways predictably irrational. “Common sense” doesn’t mean best practices. Some people might have totally appropriate but opposite stances on the same topic.
Does that mean ethical practices are a matter of choice? Of course not—ethics are a matter of common good: In his book Justice: What’s the Right Thing to Do, Michael Sandel explores timeless philosophical and theoretical questions with real-world examples. He does the same in this video:
My conclusion is that the more we abide by a code of ethics based on strict rules and procedures, the more people tend to display unethical behaviors when faced with gray areas and edge cases.
So what’s the solution?
In How Adam Smith Can Change Your Life, Russ Roberts provides extremely valuable insights to the question above. In summary, we are much better off by teaching and praising Smith’s Theory of Moral Sentiments than by creating new regulations and sanctions to prevent unethical behavior.
What All This Means for Project Managers
What’s the upshot of all this for project management professionals? We must abide by the PMI Code of Ethics and Professional Conduct, but it’s even more important that we adhere to ethics focused on the common good.
Project managers face extreme pressure. Shortcuts are tempting—but in the long run they seldom pay off. Here are two examples of unethical temptations that put our work into the broader moral perspective that I think is so valuable.
It’s easy to point fingers at doctors and lawyers—their work dramatically impacts people’s lives. A mistake made by a prosecutor may imprison an innocent. A doctor’s mistake may kill or handicap a patient.
How about project managers’ mistakes? You may put your project in jeopardy, of course. But that’s not all: You may put your team members, client and other stakeholders at risk. You may even bankrupt your organization.
The bottom line: The most surefire way to maintain high ethical standards is to think frequently about the far-reaching impacts of your work—on worker safety, the environment and social well-being, for example. Our choices matter—in ways we can’t necessarily anticipate.
How do you respond to everyday ethical challenges in your project management practice? Share your thoughts below.