Risk management is one of the principal pillars of effective project controls. It now features within most, if not all, large scale capital projects. One would therefore expect that enthusiasm for risk management would be high, particularly as it can be a key tool in delivering projects on time and within budget. Surprisingly for some, and especially those with a specialist interest in risk management, this is not always the case. In this article, P50P90 examine why.
In our experience, individuals involved with risk on projects typically possess one of three distinct risk behavioral traits at any point in time. The three being (i) Passionate; (ii) Tick the Box and (iii) Head in the Sand. Most interestingly, individuals can rotate between these behaviors switching them on and off, being super passionate about risk on one project and laissez-faire on another even a few days later. There may also be a fourth trait called “Told you so” but this one is more a subset of the Passionate one with the onset of frustration.
The Passionate One
Those with the Passionate trait are very excited about risk. They get it. Sometimes they can become over theoretical educating others on the likes of Bow Ties and Black Swans. They are very much into making risk management effective through the planning of prevention and reactionary mitigation measures. Their passion for the subject of risk is unrelenting and is always high in the early days of a project. Thereafter, their pursuit of excellence in the implementation of risk management will either remain high for the duration of a project or move to Tick the Box. The Passionate one thrives on the interest and attitude of others as to how risk is being dealt with on their project. They thrive or become broken. When they do break, they’re usually surrounded by Tick the Boxes and Heads in the Sand.
Ticking the Box
A Tick the Box individual goes through the motions. When attending a risk workshop as a participant, they’re present physically but not willingly. When attending as an accountable person, such as a project manager, their main focus is on getting the risk workshop completed and removed from their to-do list. Or their focus may be on populating a risk register as the basis of a contingency fund. Mitigation might be mentioned and documented but it’s never implemented in a serious manner. The quality of the Tick the Boxes’ risk mindset deteriorates further if they’re time constrained where their focus transfers to issues of the past as opposed to risks of the future. The Tick the Box loves risk dashboards however as they look good.
Head in the Sand
And lastly, the Head in the Sand trait. An eternal optimist perhaps but one that maybe unwilling to accept reality or listen to others. They certainly won’t get along with the Passionate one who pushes to develop mitigation plans for the big risks only for them to gather dust. The over-riding thought process is that it will never happen. Sometimes they get away with this but sometimes they don’t. Spending a small sum or doing something different to safeguard the critical path and budget doesn’t feature until the risk becomes an issue and then it may be too late.
Alignment of Best Behaviors
Achieving excellence in risk management can be challenging. Having the best people and the best systems may not be enough where different behavioral traits exist and interfere. In our opinion, only leadership and education can overcome this. There needs to be a clear message from the top of an organization that risk matters and needs to be taken seriously. Project teams need to be educated on the benefits of risk management and how it improves delivery of their project. Sometimes, the leadership team itself may need to be educated. Once the leadership team’s vision for risk management permeates the organization hierarchy and accountability for risk management ensues, only then will the alternate behaviors align for the greater good.
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