RISK MANAGEMENT

A few have incorporated risk management into their organizational culture and use it concept daily. Risk management is what you do to prepare for the unexpected. But how do you do prepare for the unexpected-it’s unexpected? Donald Rumsfeld’s ”Unknown unknowns” speech offers an explanation:

Reports that say that something hasn’t happened are always interesting to me, because there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there are also unknown unknowns-the ones we don’t know we don’t know. And if one looks throughout the history of our country and other free countries, it is the latter category that tends to be difficult one.

Rumsfeld went on to say, “The absence of evidence is not evidence of absence, or vice versa.” He explained on this in a speech at NATO Headquarters in June 2002:

There’s another way to phrase that and that is that the absence of evidence is not evidence of absence. It is basically saying the same thing in a different way. Simply because you don’t have evidence that something exists does not mean that you have evidence that it does not exist. And yet almost always, when we make our threat assessments, when we look at the world, we end up basing it on the first two pieces of that puzzle, rather than all three. 

So PM's who skip the risk management process spend lots of time firefighting on problems that could have been avoided.  On even a small project we can undertake a simple 3-step risk management process, investing as little as one hour and possibly saving days of lost time. We start by identifying 2 to 4 risks than do a "quick and dirty" assessment of the risk's potential impact. Then we plan our risk response to mitigate or eliminate the risk. 

It's easy and must become a part of our project management methodology.