Thursday, November 11, 2010

It's cultural!

A recent student of mine in risk management had this to say about risk management as a contractor working abroad:
....the most challenging factor is the cultural:
- Locals do not value risk management at the same level.
- Regulations are more flexible and international standards are not necessarily enforced\followed
- Stakeholders tendency to be more risk-takers.
- Misunderstanding of the role of Risk Management across the projects and its benefits

Unfortunately, this is not an uncommon refrain. In fact, the tension between stakeholders and the project team arises from different biases, different anchor points, and different metrics to which they are held accountable.

As a general rule, my observation is that stakeholders tend to underestimate project risks...thinking there is enough time for things to work out...and PM's overestimate risks....too much knowledge about too many things that all seem to add coherently rather than randomly

If you've read my posts on "the project balance sheet", you'll understand where I'm coming from

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