When I think of “the other side of risk – finding what can go right on your project,” sometimes I wonder if I’m thinking about the science of risk management or the emotional – personal – side of risk. Do we think about risk precisely enough to know the difference?
It strikes me that risk means a lot of things. As people taking personal risks, we are trying new things with uncertain outcomes. We see opportunities for fun, money, friends, experience, and growth. We see possible negative outcomes of losing money, having a bad time, being rejected, or damaging our reputation. We probably don’t scientifically quantify the probability and impact of the negative outcomes vs. the potential positive value of a positive outcome. Our coaches and consultants encourage us not to over think the negative side. We don’t have to know exactly what will happen, what we will do, or how we will do things. If the risk we are considering is a step needed to fulfill our aspirations or dreams, the best thing we can do is lean into it. That means take a measured step toward it, see what happens, learn, adjust, and take another step. This isn’t a scientific process. It’s an emotional one. We make personal decisions to take personal risks based on our emotional needs and desires.
In a project management or business context, the word “risk” has a more scientific feel. We buy insurance to mitigate the risk of something unknown happening. The cost of insurance is actuarially determined based on the analysis of historical occurrences of the risks being insured against and other factors. We do something similar as project managers. We try to identify events that could occur that will present barriers to our projects. These risks could be a key person lost, equipment delivered late, new laws, rising costs, or higher than expected product defects. We consider each risk’s probability and its impact in terms of costs to the project or other less tangible measures. If a risk’s probability or impact is great enough we consider what actions could reduce the probability and/or impact of the risk. The cost of the mitigating action needs to be in line with the value of the mitigating effect we expect. So we order equipment early, hire or train additional people, talk to legislators, include more money in the project, and add testing or quality controls. These mitigating actions cost money, but they are justifiable to mitigate the potential costs of risks occurring.
Another way we manage risk on a project is to consider it before we start. Considering risks is a factor in deciding if we do the project in the first place. This might be where the scientific and emotional parts business and personal risks overlap. We consider the cost of the project including the cost of mitigating risks and the benefits expected from the project. If benefits are enough greater than costs, then we can consider doing the project. After this scientific calculation, the decision can become more personal and emotional. Does the project reflect a need to grow into a stronger, more cohesive organization? Does it offer the people involved the opportunities they need personally to grow? I think that we may propose and select projects based on more than scientific assessments of probabilities, costs, and benefits. We may propose and select projects based on egos, personal aspirations, needs, desires, and beliefs, too. The projects we select reflect our beliefs about what changes will make our organization, our people, and ourselves better. We advocate for projects from the head and the heart.
If I’m right, then once we decide to do a business project, we have two sets of risks to consider – the scientific quantifiable risks and the personal emotional risks felt by ourselves, our team, and our organization. We can manage the quantifiable risks using our scientific project risk management tools. But, to manage the emotional risks that everyone feels, we have to somehow get them out in the open. This happens when people can answer questions like:
- This project is important to me because…
- This project will be good for me if…
- This project will be bad for me if…
- I want to be able to support others by….
I find that sometimes this information comes out of a team or an organization in meetings, but more often it comes out in personal conversations. As the project manager, you typically talk one on one with everyone participating in the project or concerned about it. It gives you the opportunity to identify some of the personal emotional risks that are being taken by the people on the project. And, it gives your project participants the opportunity to express them and be heard. When people know that someone hears their concerns, it helps give them the strength needed to lean into their risks.
As project managers, we want people to lean into our projects, to give more than they have before, to engage, commit, and be accountable. People take risks when they do that. Recognizing this and supporting this personal risk taking is part of finding what can go right on your project. It’s part of the other side of risk. It’s how project managers can manage all the risks: the scientifically quantifiable ones and the personal emotional ones.
Thanks for reading.
Copyright Glenn Briskin and “The Other Side of Risk” 2012
Thank you for such a great article…. It is a must read from a building point of view.