Saturday, March 7, 2020

The collision of risk and politics

There have been a lot of very high profile examples that demonstrate what seems like the evitable progression of the collision of risk and politics.  The narrative seems to always fit this frame:
  • Conventional risk management processes identify a risky situation and assess the unfavorable outcomes
  • Mitigations are designed and briefed up the chain
  • Such mitigations are immediately clamped from the top by "policy" pronouncemnts or business goals
  • A lesser mitigation is imposed -- top down

  • Then, once in operation, the unfavorable forecast comes true
  • Everything hits the fan, often in public, but almost always with customers
  • The business pays ten-fold what the original mitigation would have cost
Sometimes the original risk managers are scapegoated; sometimes the top-down managers. More often it seems, the latter.

Project balance sheet
At other times I've described this narrative in terms of the "project balance sheet":
  • Business goals and policies are one side of the balance
  • Project scope, cost, schedule are the other side of the balance
  • Where there is imbalance, risk is added to affect balance (*)
  • At the end of the day, the PMO is tagged with managing the risk between each side
  • And, if it doesn't work out, the PMO is first on the firing line!
(*) Risk is often added to both the business goals on the one side, and project elements on the other side, but nonetheless the PMO is on the point of the spear for success.

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