In chapter 11 of PMBOK 6, it mentions a document called: "defnitions of risk impact levels for the project" that is given to the project team so risk thresholds and variation around a project objective can be examined. (pg 398 KEY CONCEPTS FOR PROJECT RISK MANAGEMENT).
Has anyone seen this type of document?
I've searched the internet for "definitions of risk impact levels" and get nothing meaningful. Saving Changes...
Hi, Totally agree with Sandra. It is not clear because of the risk acceptance criteria in any company. Not all companies are ready to assume same risks even when performing same projects. In the company I work for, we have defined 5 levels for risks in projects by following same structure as per risks associated to HSE, it means we have defined different levels based on potential loss of earnings, safety issues, escalation and local, national and international impact of reputation. In case of projects we have different treshold based on days/months of delay and cost impact. regards Saving Changes...
Sandra MaughonProfessor| Piedmont CollegeCleveland, Ga, United States
This is an example (found in Google Images searching for "Risk Assessment Scale") https://wiki.smu.edu.sg/is480/IS480_Team_w...anagement_Risk. As you can see, it defines more clearly what the general words like low, medium, high, moderate, etc. mean. Teams should also define what the probability impact is as well - is low a 2% chance or a 20% chance? And detection difficulty as well. Each project would need to have these defined (even if it is a review of a standard company template) because projects vary so much in time, budget, quality, team expertise, company situations, client situations, etc. Two days in a 3-year construction project is a nit; two days in a 14-day sprint is significant.
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1 reply by Sandra Maughon
Jun 04, 2018 10:08 AM
Sandra Maughon
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Also, page 407 of the 6th edition has an example of specified definitions. Once the thresholds are set and the risks have been assessed, then the project manager (and team) has a clear idea of how to manage risks.
Saving Changes...
Sandra MaughonProfessor| Piedmont CollegeCleveland, Ga, United States
Jun 04, 2018 9:51 AM
Replying to Sandra Maughon
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This is an example (found in Google Images searching for "Risk Assessment Scale") https://wiki.smu.edu.sg/is480/IS480_Team_w...anagement_Risk. As you can see, it defines more clearly what the general words like low, medium, high, moderate, etc. mean. Teams should also define what the probability impact is as well - is low a 2% chance or a 20% chance? And detection difficulty as well. Each project would need to have these defined (even if it is a review of a standard company template) because projects vary so much in time, budget, quality, team expertise, company situations, client situations, etc. Two days in a 3-year construction project is a nit; two days in a 14-day sprint is significant.
Also, page 407 of the 6th edition has an example of specified definitions. Once the thresholds are set and the risks have been assessed, then the project manager (and team) has a clear idea of how to manage risks.
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1 reply by David Maynard
Jun 04, 2018 3:36 PM
David Maynard
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Hello Sandra,
Thank you for your thoughtful reply!
So, for each major objective, the stakeholders would create a table something like table 11-1 and give it to the project team... That implies they've combed all of the details of the project planning and scope and can prepare many of these tables. 10, 100? Can that be right?
Have you ever seen a project where the stakeholders supply probability / impact tables for the major objectives?
Risk thresholds express the degree of acceptable variation around a project objective. They are explicitly stated and communicated to the project team and re?ected in the de?nitions of risk impact levels for the project.
-- Dave
Saving Changes...
Michael DelaneyPartner| Delaney Management LLCWest Chester, Pa, United States
Have created risk levels in regard to impact and probability usually as part of the risk management plan. We used for determining the appropriate planned response and monitoring activities. Saving Changes...
While I'm reading chapter 11, I noticed that "Escalate" isn't listed as a strategy to take for "Overall Project Risk" (paragraph 11.5.2.7)
But, the guide does mention that "The same risk response strategies that are used to deal with individual project risks can also be applied to overall project risk." So, I guess ESCALATE is a valid option, just not described in the guide.
All:
Thank you for your replies!
I understand the generic low / medium / high risk assessment. But, there's something else "afoot" here I think.
The document hinted at on Page 309 - last paragraph before "Trends and Emerging..." appears to come *from* the stakeholders or sponsor(s), are for each project objective, are explicitly stated, and are given to the project team (NOT generated by the team).
This doesn't sound like the regular Risk Assessment Matrix to me. It's something else. Something from the corporation, not OPA, but specific to the project.
I've never heard of this. I don't even see how it could happen. Are the stakeholders that much in touch with the details of a project to supply this document? Saving Changes...
Also, page 407 of the 6th edition has an example of specified definitions. Once the thresholds are set and the risks have been assessed, then the project manager (and team) has a clear idea of how to manage risks.
Hello Sandra,
Thank you for your thoughtful reply!
So, for each major objective, the stakeholders would create a table something like table 11-1 and give it to the project team... That implies they've combed all of the details of the project planning and scope and can prepare many of these tables. 10, 100? Can that be right?
Have you ever seen a project where the stakeholders supply probability / impact tables for the major objectives?
Risk thresholds express the degree of acceptable variation around a project objective. They are explicitly stated and communicated to the project team and re?ected in the de?nitions of risk impact levels for the project.
-- Dave
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1 reply by Sandra Maughon
Jun 05, 2018 10:53 AM
Sandra Maughon
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I don't think I agree with the intensity of your interpretation. Of course there are going to be projects that demand very specific risk tolerances, but those would be extreme cases. I would also suggest using the priority matrix for situations with conflicting risk assessments regarding tolerances for thresholds.
I would say that Sante's comment earlier was far more useful than anything I've said: it seeks consensus on terminology and criteria.
Saving Changes...
Sandra MaughonProfessor| Piedmont CollegeCleveland, Ga, United States
Jun 04, 2018 3:36 PM
Replying to David Maynard
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Hello Sandra,
Thank you for your thoughtful reply!
So, for each major objective, the stakeholders would create a table something like table 11-1 and give it to the project team... That implies they've combed all of the details of the project planning and scope and can prepare many of these tables. 10, 100? Can that be right?
Have you ever seen a project where the stakeholders supply probability / impact tables for the major objectives?
Risk thresholds express the degree of acceptable variation around a project objective. They are explicitly stated and communicated to the project team and re?ected in the de?nitions of risk impact levels for the project.
-- Dave
I don't think I agree with the intensity of your interpretation. Of course there are going to be projects that demand very specific risk tolerances, but those would be extreme cases. I would also suggest using the priority matrix for situations with conflicting risk assessments regarding tolerances for thresholds.
I would say that Sante's comment earlier was far more useful than anything I've said: it seeks consensus on terminology and criteria. Saving Changes...
