Posts Tagged ‘probability’

Resilience Engineering #30: Balance and Perspective

by Gary Monti on January 18, 2012

Maintaining balance and perspective is key to leading complex, constrained projects. In the last blog regarding keeping one’s wits, the need for discipline was the first step mentioned. Below is a simple method I’ve used to help establish discipline and maintain balance and perspective.

Risk Analysis: A Traditional Approach

Normally risk is viewed negatively, i.e., problems in the present and threats out in the future. A common communication and discussion tool is the chart below.

Probabilities range from low, medium, and high, as do impacts. This is a good chart. The question is, though, “What would it take to make it better?” That gets to the issue of balance and perspective. It is out of balance because only one aspect of risk is being addressed, the downside. Risk management also has an upside with windfalls being events in the present that are adding constructively to the project and opportunities being future constructive events.

People are very visual. When they only see the downside and then talk to the positive balance can be missing. In other words, this chart will work better if it were expanded to include the good along with the bad and ugly (forgiveness, please, Mr. Eastwood).

Risk Analysis: A More Comprehensive View

In the chart below a better approach is shown.

Let’s look at how this works. (Before getting started I want to point out the vertical axis for negative events is flipped from the previous chart, i.e., really bad events are at the bottom rather than the top.) “Insufficient resources” is the negative event we will focus on. The flow of the conversation in dealing with this goes like this:

  1. “Insufficient resources” is a definite threat to the project with both a high probability and high impact;
  2. “Add resources” is an opportunity that will neutralize the threat and it, too, has a high probability and high impact;
  3. “Integrate additional resources” is a threat projected by the opportunity “add resources.”

Look at what this approach does:

  1. It provides balance by presenting potential opportunity AND the ripple effect in terms of a threat that this opportunity poses. The team gets a chance to have a more integrated conversation – one that leads to more cohesive actions and interactions;
  2. Perspective has been added. The visual is more balanced. We’ve built something that reflects that. Again, people are visual and pay attention to what structures they can feel, touch, and deal with, and;
  3. This is a more disciplined approach. (Remember the previous blog about keeping one’s wits?) The entire picture is presented.

Working in this manner helps dampen the types of conversations that would end at “adding resources.” If this were to happen, after the meeting people might start talking something like this, “Well you know, someone has to take care of these resources. Where are they going to sit? Who’s going to bring them up to speed?” Talking in this manner risks poisoning the underlying conversation and undermining the credibility of the project and project manager.

With the leader bringing as much as possible out in the open for discussion the chart gets increasingly robust by avoiding being naïve and overplaying the opportunities as well as avoiding promotion of only a “downside” frame of mind. It also challenges people to participate and stop reserving comments for the gossip mill. The leader is in a better position to promote participation and a healthy sense of responsibility. Those who are realistic, positive and forward looking get a much-needed boost.