Risk Analysis Doesn't Have to Be Scary

I'm working on a project and we're having an important phone meeting on Friday. The Project Manager (my friend) was talking with me about some things that could go wrong. What if the clients postpone the call (again)? What if they don't like who we're proposing to do the work? What if the partner on the call goes off on a different agenda that doesn't further the purpose?

My friend was spit-balling ideas and worries. "No problem," I said. "You're doing a risk analysis and that's the perfect thing to do at this time." I suggested we talk about the very worst case scenario that could happen – just to get that out of the way. My friend laughed.

We realized that even if the worst happened, we could deal with it. Even thinking about the worst possible thing happening was balancing. What if these things did happen? Would we survive? (Of course!) Would the world fall apart? (Well, no.)

Doing a risk analysis in a project involves a few more steps but this is a good start. It's also a great way to get perspective on a project and deal with what could go wrong... or very right!

Deficiencies: The Achilles’ Heel of Construction Projects

This week, please welcome Paul Behner, an accomplished project manager in the construction industry, as my guest writer.

Deficiencies are a standard line item on most, if not all, construction projects.

Construction project deficiency is defined as a characteristic or condition that fails to meet a standard, or is not in compliance with a requirement or specification, and is sometimes referred to as defective work.

Frequently, the term deficiency is confused or misinterpreted as incomplete work and, more times than not, it's used under lien act legislation to delay substantial completion milestones which trigger holdback releases. In reality, a deficiency is not the same as incomplete work. From a legal perspective, only incomplete work affecting the beneficial use of the facility or asset intended from the project performance determines substantial completion.

Without evaluating the global issues surrounding the interpretation of substantial completion, it is fair to say that both deficiencies and incomplete work are routinely misunderstood.

There is inherent ongoing risk to the general contractor who is responsible for contract performance of all trade subcontractors and suppliers. This includes all work until project close-out, with the exception of warranty work. The ongoing issue of ineffective deficiency management cannot be improved without first breaking down the problem. Until then never-ending deficiencies will inevitably remain the Achilles' heel of successful project delivery and, in turn, erode profitability and customer satisfaction.

Deficiencies are commonly cited as the barrier to successful project completion. To get to the core issue, it is more effective to consider a deeper understanding of project management which goes beyond the deficiency issue. The General Contracting business is as much about time sensitive delivery of a specified product or facility, as it is about operating a business. The business strategy ought to be focused on exceptional project delivery, therefore requiring exceptional project management proficiency.

Without question, deficiencies are an anticipated task and risk of every project and should be managed holistically within the project management plan. Whether deficiencies are the catch-all reference for incomplete or defective work being a chronic issue plaguing success, a project management plan that includes the five phases will greatly improve project close-out and overall performance. There is only one solution to effectively manage construction deficiencies and that is by way of a project management plan with improved guidelines on project close-out.

Paul Behner has spent 30 years in the construction sector. He provides strategic consulting on the full-cycle management of a project from planning to execution to close out. Visit his website at greentreepm.ca.

The Desiderata for Projects

You are a child of the universe no less than the trees and the stars; you have a right to be here. With all its sham, drudgery and broken dreams, it is still a beautiful world. Be cheerful. Strive to be happy.
(from “The Desiderata” by Max Ehrmann, 1927)

My brother Jim gave me a poster with the Desiderata poem on it for Christmas when I was a kid. The poem was quoted by Prime Minister Pierre Trudeau when his government lost its majority in the 1972 federal election; he said, “The universe is unfolding as it should.”

Morgan Freeman told Oprah Winfrey that the Desiderata shaped his life.

If you are in the middle of a project or two, the Desiderata has some good advice for projects, as well, such as:

• Project Risk: Do not distress yourself with dark imaginings. Many fears are born of fatigue and loneliness. (Remember the Utility Theory of Risk.)
• Project Communications: Speak your truth quietly and clearly; and listen to others.
• Project Integration: And whether or not it is clear to you, no doubt the universe is unfolding as it should. (Useful to remember when we’re keeping the project together.)
• Project Human Resources: Enjoy your achievements, as well as your plans. (Remember to build in those recognitions and awards and never forget project planning!)

The Best Kind of Goal for Managing Change

I attended a workshop recently which was about change and how people deal with it. My goal in attending was mainly to learn more about myself and how I react to change that I didn’t originate (that is, a change imposed upon me).

I learned much from this workshop. One key point was to focus on learning instead of on performance during such a time of forced change.

Here is a tip I found useful: If your first reaction to something unfamiliar is, “I can’t do that,” instead say, “How do I learn to do that?”

The course taught*: “When facing a challenge, some people adopt performance goals which focus on demonstrating a certain level of competence. Others adopt learning goals which focus on increasing their capability. Learning goals are generally more helpful than performance goals during periods of change.

People with learning goals tend to see setbacks as information about the effectiveness of their strategies and become motivated to keep trying. They understand that learning new skills often requires going through a phase of awkwardness, confusion and failure.”

Knowing that on the other side of confusion and awkwardness is the learning, keeps me keeping on learning.

I hope you found this useful. Please let me know how you implement it in your work.

* excerpt from Developing Resilience During Change by Gregg Brown, Tidal Shift Inc. - for more info contact gregg.brown@tidalshift.ca

Sully, the Risk Manager

I went to see Sully last week, a movie based on a true story. Sully - Captain Chesley "Sully" Sullenberger - performed a great act of risk management.

An airplane pilot, Sully made a quick decision when his plane hit a flock of birds, lost the use of both engines, and was in danger of crashing. He was flying above New York City when this happened, with approximately 150 passengers on board.

Sully decided to land on the Hudson River instead of trying to make it to the nearest air field.

Afterward, the landing was investigated by the US Transportation Security Administration. During the investigation, flight simulations seemed to prove that Sully could have made an airfield landing, instead of on the river as he did.

It hits Sully that there was one element missing in the investigation: the inclusion of the human factor. After all, making this type of landing was something he, a pilot with 42 years of experience, had not done before. When this factor was taken into account, he was proven right - landing on the Hudson River was the best option.

While making the decision to land on the river, Sully encountered a risk and dealt with it. According to the Project Management Institute (PMI), a risk is an uncertain event or condition that, if it occurred, would have a positive or negative effect on the project's objectives. Decidedly, flying into a flock of birds was a negative risk event, as was crashing!

Sully and his co-pilot followed the steps they were trained to do (the risk response plan) when the bird collision occurred: they notified their air traffic controller. But the solutions offered from ground control weren't viable in the situation - they didn't have time to get to the nearest landing field. So Sully made the decision to land on the Hudson River. This was their work-around, their solution to an unanticipated problem.

At the time, training for duel engine failure wasn’t something pilots usually did. (npr.org/templates/story/story.php?storyId=99480314)

What was going through Sully’s mind as he was making the necessarily quick decision? I think it would have to do with the probabilities of the different scenarios being successful, and the impact if they weren't. So he did what had the highest probability of success and the lowest impact of failure (loss of life) - he performed an on-the-spot risk analysis.

The story ended well (as my favourite movies do!) and Sully was regarded as a hero. His knowledge and quick thinking saved the lives of all who were on Flight 1549 from LaGuardia Airport that day.

The Unmet Needs Committee

I was listening to CBC Radio while driving in my car last week. With the recent Fort McMurray fire in Alberta, CBC reporters were interviewing people from Slave Lake, Alberta, who had assisted those who needed help when a fire occurred there a few years ago.

When asked what they had done to help, one of the interviewees said they had formed an 'Unmet Needs Committee'.

I had not heard of this term before, but thought it was pretty clever. It turns out, an unmet needs committee is a standard procedure in the case of disaster. This committee is generally used as a last resort, where other groups or funding cannot help with the situation.

This got me to thinking - are my projects always on the lookout for unmet needs? Sometimes it is easy to overlook or ignore unmet needs - certainly not a PMI best practice!

On a final note, I would like to extend best wishes to those who escaped the Fort McMurray fire.

A Successful Person

A few weeks ago while I was visiting my mother in Newfoundland, she received a letter in the mail. It was a note from a doctor’s office saying she had an appointment for an urgent blood test. She had told me about the appointment, but it wasn't till I saw the letter that I realized it was urgent.

When I mentioned to my mother about the urgency, she shrugged and said, “I’ll deal with it when it comes.” I was impressed.

A lot of people become obsessed when they think they might have a problem, especially with their health. Not my mother. I would guess she did a quick rundown in her head about the options and alternatives, and decided her plan of action - which was to take it as it came.

I was going to write about how my mother’s situation is a perfect example of risk analysis - identify the risk events, figure out the probability and impact, and determine your response. And then I saw this article, and thought, “Hey, my Mom is one of those “successful” people.” (Of course, I already knew that!) She did exactly what the article said. So, whether the success is making money or achieving a happy life, here’s some research: How Successful People Stay Calm.

Risk and Dr. Seuss

I was talking with a friend over Christmas who told me of a crisis she had been through. She was in a foreign country and received word that a large contract of hers back home was having major unexpected difficulties.

Here she was, far from home and her customer. What was her first thought? Panic. The second was “Hold on a minute, what can I solve by panicking?” So she called a colleague who helped her out, she put the situation in a positive frame in her mind, and let it go.

The result? The contract wasn’t cancelled, things settled, and my friend got to enjoy her holiday at peace. Whether the contract was cancelled or not, my friend had decided that it would all work out, so that was a success in itself.

As Project Managers, we have decisions to make all of the time. Some of these decisions may cause us stress if we feel out of control. So - what to do? Besides having a risk strategy in place, with risk responses planned for those potential threats or opportunities, having the mindset to deal with stress can go a long way. If we know that things can happen and frequently do (thanks Dr. Seuss!), then we can handle them. Of course, when we work out how to proceed if a crisis does occur, we don’t need to focus on the potential problems and can dig up the prepared solution when/if they happen. Like having the masks ready-to-go on the airplanes.

May you be off to Great Places!