Gregory AlexanderFounder and Principal| Real World Quality SystemsCrystal Lake, Il, United States
I have seen a lot of good discussion about risk tolerance, risk appetite and risk attitude. What templates, formats, protocols do you have for documenting the results of these? What value do you see in document these? Asking for a friend.... Saving Changes...
I'd suggest that this would be a good column to add to a stakeholder register. It's also important to recognize that risk attitudes, appetites and tolerance are context-specific and vary based on what the risk impact is. For some, a cost impact might be perceived much worse than a schedule one so they'd be more risk tolerant of a negative schedule variance than a negative cost variance.
I used to have a Risk Register that would contain any risk in the project. I found that it actually worked well with the different stakeholders. Saving Changes...
Gregory AlexanderFounder and Principal| Real World Quality SystemsCrystal Lake, Il, United States
Thanks you two. I have taught risk id, risk analysis (prioritization) and risk response plan, but without the risk appetite context. What do you think of this addition to the curriculum? Feedback welcome.
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How to characterize?
Although people may tend toward a generic risk orientation, the risk attitudes we want to capture are project-specific.
An approach to deal with the inherently subjective nature of risk attitudes is to have stakeholders force rank the key project constraints. The more quantitatively this can be accomplished, the more useful in designing the appropriate risk response plans for each significant project risk.
Some example characterization statements are as follows:
· any delay in completion date beyond 6 months is unacceptable
· 3 months delay in project completion for an increase in first-year sales of 40% is an acceptable trade-off
· up to 20% resource (cost) overrun is worth getting the project completed on time
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How to gather the data?
The recommended approach is to include questions regarding risk attitude in the initial stakeholder engagement exercise.
For large, high-risk projects, the extra effort using a highly structured approach such as Conjoint Analysis should be considered. Saving Changes...
Sergio Luis ConteHelping to create solutions for everyone| Worldwide based OrganizationsBuenos Aires, Argentina
We do that in our project stakeholder analysis. It is part of our knowledge management system because it is our or most valuable assessts for future projects, no matter each initiative is different. Saving Changes...
