In the lecture slides this week, we learned about all things risk management. Starting in the planning phase, a part of DDP is to do risk analysis to determine the probability some undesired consequence will occur in order to decide whether or not to do a project. Risk Management looks at all areas of a project, and specifically how something can fail, the severity of the consequences, and the probability of occurrence. All of this is handled by the "Risk Management Team." The risk management team is apparently often comprised of the same people who are on the project team. My question stems from the seeming lack of rigid guidelines based on risk. There is obviously a grey area on when to shut down or continue a project with assessed risk, but when the project leader / risk team leader has a personal connection to the project, are there times where this grey area is stretched much farther than it should be in order to keep going with a risky project? And what happens to those projects?
Honestly I don't think there is a grey area on when to shut down or continue a project with an assessed risk. I think that when a risk analysis is done and the results are shown to the company/stakeholders/sponsors, they will be the deciding factor on whether the project will be a go or a no-go, if the risk:reward is positive or not. I don't think there will be a point when a team leader having a personal connection will affect if a project gets to continue or not, if the risk is of a severity that does not have a foreseeable benefit to the company/stakeholders/sponsors to justify the risk then it is likely to not be given a green light in the first place. Now if this personal connection leads to a team leader fudging the risk analysis data, then I think there will be some severe consequences. There are ways to change the risk associated with a project such as avoidance, mitigation, acceptance, and transference. These ways of dealing with risk should be looked into, but the basic rule of thumb would boil down to risk vs. reward.
It is hard to understand what you fully mean by your question Ryan. To fully grasp the concept of your question I would like to know what you mean by personal connection? The most severe case I could imagine would perhaps be a project leader who needs to move forward on a project that they believe would help a family member. In a less extreme case, a project they have been researching for years, but is very risky to create. However, in either case I believe it would be determined how Anthony had said it, risk vs. reward. At the end of the day a project requires funds in order to operate. Without funds there are no source of materials, and likely no people to work on the project. If a project is determined to have too high of a risk factor than it is probable the project will get cut, or thrown back onto the drawing board. Personal connection or not, if a project is found to have too high a risk it will not proceed. If the project leader wants to continue work on the project, they will most likely have to do so at their own expense, and on their own property.
I'm not 100 percent sure on what your point is but I'll try to answer to the best of my ability. The only situation I can see when that might be an issue is when a project leader gets promoted to a higher position which may have the ability to choose the continuation or end of a project. It's probably too rare to talk about though.I agree with Anthony and jb678 in that the only opinion that matters is that of the shareholders (they're the "boss" in a public company. The wrong decision loses them and you money, which may lead to your termination if it's shown that the wrong decision was made by you. If I misread your post, let me know. I believe this answers your question.
Evaluating risk may not be as murky as it may first appear. The lectures does not go too deep into risk management, but after assessing the risks, there are methods to better quantify the risks involved. Performance measurement metrics could be used directly in evaluating FMECA scores when determining the likelihood of failure. Of course, there is some subjective judgement, but that judgement is based on the business strategy. If the risk involved cannot be be managed to be acceptable by the company, then the project will have to be discarded or pushed off until a later time. The only way I can see a Project Manager can push for a high risk project that he/she has a personal connection to is by putting in greater effort into managing the risks. Overlooking some risks based on a personal agenda will result is severe consequences to the Project Manager if those potential hazards do result in negative consequences.
You bring up a really good point where you say that a project leader or risk leader develop a strong connection to the project, and therefore continue on with something that is too risky. I think that this a very valid scenario, and even though it might not occur often, when it does happen it might be detrimental to someones career or a company. I am honestly not sure to what happens to these projects, but I do have a solution to prevent this. I believe that it is important to have meetings with another risk specialist, a person who is contracted from the outside, who can give an unbiased objective opinion on weather the project should be continued or not.
i don't think the group leader/ risk management leader will do that as investor's invest a lot of money in the project and if the group leader/ risk management leader somehow show that it's a low risk project and go through with it then this is against professional ethics.This will ruin his/her career and company's reputation as well if things don't go as planned.
This is the reason why some companies have a completely different risk management team so as to have a unbiased opinion on the project and be blunt about the risks.
If a manager or team member has a personal connection to the project, and that project looks like it will not succeed, it can be very challenging to pull it off. If a risk management team decides that a project is too risky to keep going, they should have the power to shut that project down. But there should be an opportunity for the employees closely connected to the project to give their input on why a project should keep going. If they get the opportunity to give their input, they might have strong evidence in support of their argument that the risk management team might have overlooked. After this is done, the risk management team should go back and re-assess the risk of the project and make a final decision. This process will help in the length a project is dragged out. It will be an efficient way to tell if it's worth it to keep going or not.
In my opinion, if the probability of risk is analyzed to be high then an analysis needs to be done about the costs involved in getting those risks eliminated. If the risks can be avoided within a small budget then the project can go ahead after the elimination of the possible risks. However, if the risks involved are severe and cannot be avoided at all then considering to give in for sometime until a way is found out would be great instead of wasting the resources when the end result would not be successful enough.
Risk management team itself define whether the project is in a critical stage or else problem occurred in the project sloved by risk management team.
They deals with executive leadership,suppliers, team , customer and mainly project manager in order to slove the problem
I don’t believe that a risk management leader should opt for that as investment requires a lot of money. I think it would be unethical and unprofessional to go through with a project knowing well in advances that the risks are enormous for the company.
A risk management team is a separate and often independent unit within the project management team headed by the risk manager or the chief risk officer. The role of a risk manager is to communicate risk policies and processes for an organization . They provide hand on development of risk models involving market. The purpose of risk management is to identify potential problems before they occur, so that risk handling activities may be planned and invoked as needed across the life of the product or project to mitigate adverse impacts on achieving objectives.
In the lecture slides this week, we learned about all things risk management. Starting in the planning phase, a part of DDP is to do risk analysis to determine the probability some undesired consequence will occur in order to decide whether or not to do a project. Risk Management looks at all areas of a project, and specifically how something can fail, the severity of the consequences, and the probability of occurrence. All of this is handled by the "Risk Management Team." The risk management team is apparently often comprised of the same people who are on the project team. My question stems from the seeming lack of rigid guidelines based on risk. There is obviously a grey area on when to shut down or continue a project with assessed risk, but when the project leader / risk team leader has a personal connection to the project, are there times where this grey area is stretched much farther than it should be in order to keep going with a risky project? And what happens to those projects?
I think it's rare than an entire project will be shut down because it's deemed "too risky". A lot of pre-planning and investigation is done just to determine which projects a company will work on, so from a business perspective, once a project is green-lit, there needs to be some extenuating circumstances to shut it down. The purpose of the risk management process is to identify the risks associated with specific features on a part failing (captured in a design FMECA) or with certain process steps failing (process FMECA). For example, the risk associated with an implant fracturing is that it won't perform as expected and will most likely cause the patient pain and need to be replaced in a revision surgery. That is a pretty high risk, so extensive testing will be done on the product to simulate the expected loads the implant will need to withstand throughout its lifetime. If the testing fails, the product will need to be re-designed and re-testing until it passes. The best way to avoid risk is to design out potential failure modes (i.e. removing risky features all together), but if that can't be done, then you'll need to modify the existing design accordingly to reduce the likelihood of a failure occurring.
Risk management is concerned with identifying risks and drawing up plans to minimize their effect on a project. Project risks affect schedule or resources of the project and Product risks affect the quality or performance of the product being developed.
Risk affects all aspects of your project–your budget, your schedule, your scope, the agreed level of quality, and so on
The Risk management Process
Risk identification • Identify project, product and business risks;
Risk analysis • Assess the likelihood and consequences of these risks;
Risk planning • Draw up plans to avoid or minimize the effects of the risk;
Risk monitoring • Monitor the risks throughout the project;
I believe Ryan brings up a valid point on the grey area of when to shut down or continue a project, as a 10% risk factor may not hinder the continuation of the project, but what about a 20% risk factor? Even after performing a risk vs. benefit analysis, the threshold point is a bit of a grey area, as the percentages are not set at a fixed value, may have a range, or may differ from company to company. As for the risk team leader's personal connection to the project, there is usually a risk management team and I agree that it is unethical for the risk team leader to reject the team's input for own personal reasons. Furthermore, it may not be beneficial for the company as a whole if the risk team leader is very personally connected to the project in a negative way, where risks are not evaluated carefully. If risks are not carefully evaluated, these projects may not succeed, yet can be corrected in a variety of ways, mentioned previously. Therefore, one can stretch the limits of risk factors, but will evidently either be fired or have to handle them nonetheless.
