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Risk descriptions from 'Coconut island' risk workshop

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These slides are from The Risk Doctor, David Hillson's, section of the presentation at the recent APM Wessex branch afternoon risk workshop. This event was held at the Ageas Bowl in Southampton on Tuesday 1st April 2014.

David Hillson is an honorary fellow of APM and is known globally as 'The Risk Doctor'. David is well-known as an excellent speaker, presenter and trainer. Countless individuals, teams and organisations have benefited from his blend of thought-leadership with practical application, presented in an accessible style that combines clarity with humour. David’s speaking is guided by the Risk Doctor motto: “Understand profoundly so you can explain simply”.

David sat on the panel of experts for this workshop-based event and shared his expertise with delegates who were looking for a learning experience in risk.

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Risk descriptions from 'Coconut island' risk workshop

  1. 1. Page 1Copyright © 2003-14 The Risk Doctor Partnership The importance of risk descriptions Dr David Hillson – The Risk Doctor © 2003-14 The Risk Doctor Partnership, Slide 1 When is a risk not a risk? The importance of risk descriptions Dr David Hillson HonFAPM PMI-Fellow FIRM The Risk Doctor The Risk Doctor Partnership david@risk-doctor.com www.risk-doctor.com © 2003-14 The Risk Doctor Partnership, Slide 2 Risk = Uncertainty True or False ? Risk = Uncertainty that matters (i.e. can affect objectives) Risk and uncertainty ≠
  2. 2. Page 2Copyright © 2003-14 The Risk Doctor Partnership The importance of risk descriptions Dr David Hillson – The Risk Doctor © 2003-14 The Risk Doctor Partnership, Slide 3 What is a risk? Risk connects uncertainty with objectives “An uncertain event or set of circumstances that, should it occur, will have an effect on achievement of objectives” (APM BoK6 & PRAM Guide) “The effect of uncertainty on objectives” (ISO 31000:2009) © 2003-14 The Risk Doctor Partnership, Slide 4 What kind of effect? “Impact” assessed against objectives But what kind of impact “matters”? Could be either positive or negative Uncertainty that helps as well as uncertainty that harms Both need managing proactively
  3. 3. Page 3Copyright © 2003-14 The Risk Doctor Partnership The importance of risk descriptions Dr David Hillson – The Risk Doctor © 2003-14 The Risk Doctor Partnership, Slide 5 “An uncertain event or condition that, if it occurs, has a effect on an objective” (PMI® PMBoK Ch 11) Risk includes both opportunities & threats positive or negative What is a risk? “…uncertainty can affect the achievement of a project’s objectives either positively or negatively. The term “risk” is therefore used to cover both uncertainties that could hinder the project (threats) and uncertainties that could help the project (opportunities).” [APM PRAM Guide] “Note 1 – An effect is a deviation from the expected – positive or negative.” [ISO 31000:2009] © 2003-14 The Risk Doctor Partnership, Slide 6 Why are risk descriptions important? A good risk description enables: Understanding Prioritisation Management A good risk description must be: Clear Comprehensible Unambiguous
  4. 4. Page 4Copyright © 2003-14 The Risk Doctor Partnership The importance of risk descriptions Dr David Hillson – The Risk Doctor © 2003-14 The Risk Doctor Partnership, Slide 7 What is the risk? Typical examples: Resources Requirements The economy Competition Overspend/late delivery Safety incident Job (in)security … Are these clear, comprehensible, unambiguous? Do we understand these risks? Could we prioritise them? How would we manage them? © 2003-14 The Risk Doctor Partnership, Slide 8 What is not the risk? A risk is not: A problem, issue, requirement, constraint … These are all facts – no uncertainty A result, outcome, effect … These are results of risks – why it matters
  5. 5. Page 5Copyright © 2003-14 The Risk Doctor Partnership The importance of risk descriptions Dr David Hillson – The Risk Doctor © 2003-14 The Risk Doctor Partnership, Slide 9 What is not the risk? CAUSE EFFECT Fact Possible result UncertaintyRISK Don’t confuse cause, risk and effect © 2003-14 The Risk Doctor Partnership, Slide 10 Risk description using risk metalanguage A structured description of a risk which separates cause, risk and effect “As a result of <1. existing condition>, <2. something uncertain> may occur, which would lead to <3. effect on objectives>” Key words : 1. is, do, has, has not … [present condition] 2. may, might, possibly … [uncertain future] 3. would, could … [conditional future]
  6. 6. Page 6Copyright © 2003-14 The Risk Doctor Partnership The importance of risk descriptions Dr David Hillson – The Risk Doctor © 2003-14 The Risk Doctor Partnership, Slide 11 Real examples: cause, risk, effect The current hardware is not fast enough to support testing. This means that we may be unable to test performance until production hardware is used. A number of usability issues have been identified by the supplier who plans to raise change requests. Extra work may be identified at the detailed design gateway as the full statement of work is not available at project start The team does not have a documented design for the XYZ function. Therefore there is the risk that the architecture may not support the required functionality, resulting in the requirements not being met and/or a higher number of defects. The development team may not perform the tasks in the order laid out in the schedule. This could result in the dates and quality of deliverables being unpredictable. One contractor left in week 36, another joined start week 37. The inevitable disruption is not catered for by contingency. Given the unusually high number of builds to be carried out, test cycles may take longer than planned, which will consume significant additional amounts of time and resource Allocated resource may be reassigned to higher priority projects We are modifying one of our most complicated components. We have very little time for these changes. We rely heavily on ABC being delivered on time © 2003-14 The Risk Doctor Partnership, Slide 12 Why bother? Good risk descriptions: generate understanding permit prioritisation support management Good risk descriptions will be: clear comprehensible unambiguous Use risk metalanguage to describe risks Include both threats and opportunities
  7. 7. Page 7Copyright © 2003-14 The Risk Doctor Partnership The importance of risk descriptions Dr David Hillson – The Risk Doctor © 2003-14 The Risk Doctor Partnership, Slide 13 More information from David Hillson david@risk-doctor.com www.risk-doctor.com
  8. 8. RISK DOCTOR & PARTNERSRISK DOCTOR & PARTNERSRISK DOCTOR & PARTNERSRISK DOCTOR & PARTNERS For over ten years, The Risk Doctor Partnership has provided specialist risk management consultancy from our team of senior risk experts. We offer high-quality professional advice to clients across the globe, combining leading-edge thinking with expert practical application, providing access to the latest developments in risk management best practice. Services from The Risk Doctor Partnership are available worldwide through our network of partners, who include world-class experts in various risk specialisms. Full details of the business are on our website www.risk-doctor.com. The website also offers a wide range of free resources (videos, webinars, briefings and papers), and you can raise specific queries for rapid diagnosis. About the Company The Risk Doctor Partnership offers a wide range of services, including: • Risk process review and development, benchmarking your approach against best practice & recommending practical improvements to strengthen risk management to meet the specific challenges of your business • Risk workshops, helping you to define your risk appetite, set risk thresholds, identify and prioritise threats and opportunities, assess risk exposure, and develop effective responses to exploit uncertainty and create value • Risk presentations, from keynotes to briefings, for major conferences or small teams, presenting the latest ideas in risk management in an accessible style that combines clarity, humour and practicality • Coaching and mentoring, providing personal input and support to key individuals or small teams, sharing and transferring expertise • Risk training, offering a range of learning experiences to raise awareness, create understanding and develop skills, designed for senior leaders, project managers & their teams, and risk practitioners About the Risk Doctor Dr David Hillson is The Risk Doctor. He is an international risk consultant, and leads the team at The Risk Doctor Partnership. He has helped a wide range of organisations to manage their risk successfully at both strategic and operational levels, and many executives and leaders have benefited from his insights through personal coaching. David is also a popular conference speaker and frequent author on risk, making complex concepts easy to understand. David has developed a number of innovations in risk management, which have been widely adopted. He is best known for championing the inclusion of opportunity in the risk process, and he has recently developed ground-breaking practical frameworks to address risk appetite, risk attitude and risk culture. David’s risk work has been recognised with several awards, including “Risk Personality of the Year” for 2010-11. He received the PMI Fellow Award, the PMI PM Excellence Award and the PMI Distinguished Contribution Award from the Project Management Institute (PMI). He is also an Honorary Fellow of the Association for Project Management (APM), and a Fellow of the Institute of Risk Management (IRM). David was elected a Fellow of the Royal Society of Arts (RSA) to contribute to its Risk Commission, and he is a Chartered Fellow with the Chartered Management Institute (CMI). CONTACT US TODAY Risk is everywhere and presents a range of threats and opportunities which need to be managed proactively if we are to minimise problems and maximise benefits. The Risk Doctor Partnership offers high-value solutions for effective risk management. Contact us today at info@risk-doctor.com to find out how you can benefit, or visit http://www.risk-doctor.com for full details. Risk Doctor Network The Risk Doctor Partnership maintains a global network of people who want to keep in touch with latest risk management thinking and practice. Network members receive free regular email briefings on current risk management issues. To join the Risk Doctor Network, click the “Join Now” link on our website, or email to newsubscriber@risk-doctor.com and provide your name, position and email address. Briefings are available in multiple languages.

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