Portfolio Risk (and Vulnerability) Management

Introduction

As a project manager you are (or you had better be) very aware of project risk.  And you are aware (or you had better be aware) that risk comes to us as positive risk (opportunity) or negative risk (threat).

This posting is about something ever-so-slightly different.

First of all, it’s not really threat we’ll discuss here, but vulnerability.   Next, it’s not really at the project level that this post will cover risk management, nor even at the program level, but at the portfolio level.

The Rejection of Sustainability as ‘yet another ridiculous bothersome constraint’ by Project Managers

In fact, as we research the intersection of sustainability and project management, we find that it may be necessary to ‘escalate’ the level at which we approach this from the project level to the PMO or portfolio level.  Why?  To put it bluntly and rather directly, we’re finding – disappointingly – that many project managers still, just don’t “get it” when it comes to sustainability.  They cling to the idea that “I manage my project, and that’s it.  Any other stuff you throw at me, like this “sustainability junk” (as some have actually put it to us) is extra work.  Not only that, but your sustainability stuff brings with it the luggage of an ‘extremist’ view which is not my view or my company’s view”.  These aren’t actual quotes but it’s a composite of a palpable chunk of feedback we’ve seen as we ‘make the rounds’ on Linked In, PMI Chapters, Twitter, and in our seminars.

The Program and Portfolio Level

At the program – and in some organizations, at the portfolio level, the suite of projects being performed is much more connected to the the execution of the enterprise’s strategy, and thus, closer to the enterprise’s mission and value statements.  And these mission and value statements are much more likely to be connected, in turn, to the portfolio/program level than they are to a remote project manager and his or her specific (and likely much smaller) project.  And it’s at this level, perhaps at the PMO level, where cross-project common threats and opportunities are identified.  It’s also at this level where the management reserves are set aside to cover these common threats across projects (for example a labor strike).

Threats and Vulnerabilities

We could get into a whole philosophical argument over the definitions of vulnerabilities, threats, and risks, and in fact, if you want to go down that road, click here.   For our sake and so that we can get to our main point, let’s say that vulnerability will, to us, represent exposure to a threat.

Climate change vulnerabilities

So…to our point – and one that is right at the intersection of sustainability and project (or rather PORTFOLIO) management: Climate Change, whether you believe in it or not, is being assessed by those with some reasonable science behind them, to cause some vulnerabilities.  Those vulnerabilities include Health Risks, Weather Disasters, Habitat Loss, and Economic Stress.  We think you’d agree that if you are running a project – or a portfolio of projects (say, constructing some bridges) in a region which will be hit with any of these, it would expose your portfolio to threats.  To that end, a very good graphic has been created by DARA , a Madrid-based humanitarian advocacy organization.  This is the image we’ve used in our post and by clicking on it you will get the full-sized PDF of this infographic.  Or just click HERE.

Below is the text that describes what is shown on the chart:

The punch climate change packs varies from one country,
region or continent to another. DARA, a Madrid-based
humanitarian advocacy organization, recently partnered with
the Climate Vulnerable Forum, comprising countries particularly
vulnerable to climate change, to create Climate Vulnerability
Monitor 2010, an atlas of vulnerability. This infographic
presents a small portion of the picture the Climate Vulnerability
Monitor paints.  Vulnerability is grouped into four
categories: health impacts, weather disasters, habitat loss
and economic stress. Circles on the left side of each set
indicate relative magnitude of vulnerability in 2010. Circles
on the right indicate the same for 2030.

Our message to you is two-fold.

1. If you are a project manager, look up.  Look up to  your program and portfolio levels.  Look up further, to your organization’s strategies.  Look even further up – to the organization’s mission and vision statements. And..look even further up – is that a hurricane cloud?

2. If you are a project, program, or portfolio  manager, or a PMO staffer, or a business manager who happened to read this post by accident, have a look at the infographic.  H ave you considered these vulnerabilities?  They’re possible.  They should at least be considered.  And even if you are the world’s biggest cynic on climate change, it’s still important for you to know that this science is in the minds of others, others that you deal with.

Thanks for your attention.

More like this in our book – Green Project Management, and in our upcoming seminars and webinars.  Stay tuned for announcements about those…

A crude solution

apollo13

“A Workaround is a solution to an unanticipated problem. Not to be confused with a contingency, or backup plan, which is conceived in advance, a workaround is a far less elegant solution to the problem. Typically, a workaround is not viewed as something that is designed to be a panacea, or cure-all, but rather as a crude solution to the immediate problem.”

The above is taken from an excellent resource for PMs – a blog called Project Management Knowledge.  They have a glossary and this is the definition of workaround.  We like it.  That is, we like both the site and their definition of ‘workaround’.

At the time of this posting, the Ron Howard movie Apollo 13, starring Tom Hanks, Kevin Bacon, Gary Sinise, and Ed Harris, is showing on Home Box Office (HBO).  Also at the time of this writing, the Gulf oil spill continues and repeated attempts to fix it have failed.  Attempts with names like Top Hat, Junk Shot, Top Kill, and the latest, Slice and Cap, are a strong giveaway that what we’re working with here are, in fact, clearly workarounds.  In fact, we understand that James Cameron has been invited to help solve the problem, based on his work with advanced underwater robotics from his film The Abyss.

The reference to crude, the fact that the new mission of Apollo 13 was to get the astronauts back to Earth, and this being a blog called EarthPM combined with the crude that is pouring into the Gulf and the workaround(s) being attempted to fix that problem seemed to me to have way much too much ‘karma’ to not generate a post – a valuable one, we hope.  Oh, wait, there is the other connection of movies to the Gulf with the James Cameron invitation.  Wow, that is a lot of karma!

I suggest you start by watching this scene from the movie.

OK, if you have seen the movie, that was a good refresher, right?  And if not, suffice it to say that at this point, NASA is furiously searching for a way to save the lives of the astronauts, having scrapped the original objective the moon landing project long ago – just as BP is furiously searching for a way to stop the leak, the lawsuits, the damage to the environment, and to minimize the reputation damage they’ve suffered, to say nothing of avoiding criminal charges, having scrapped the original objective of the well (drawing oil from it to make money).

So let’s bring this back to Project Management again.

When we manage a project, we do a thorough job of Risk Management Planning, including the creation of  a Risk Management Plan – to tell us how, in general, we’ll deal with risk on the project.  This includes the ways in which we’ll identify risk, and general broad brush plans for contingency management.   Up front, in the project, we go through Risk Identification, Analysis (both qualitative, to see which ones have the highest risk factors, and quantitative, to further analyze those with the highest risk factors).  Only after we really have a handle on the project’s risks do we go through the details of responding to risk.

Furthermore, even after all this is done, we don’t stop.  We monitor and control risks to see, for example, if new risks have popped up, or if our current assumptions are still valid, or if the risk response plans we’ve put in place are working.

So, all that said, what if our risk response doesn’t work?

That’s where the word contingency comes in.  Contingency is money, time, or resources (like a life-saving flotation device) set aside to minimize the impact of the risk that is now triggered.  These are thought of in advance.  In the Apollo 13 dialogue, you hear the engineers actually use this phrase (“we didn’t have a contingency for this”).

On a cruise ship, a fleet of lifeboats on a cruise ship is part of their contingency planning. If contingency is a house pet, a workaround is a very different animal.  A workaround, unlike a contingency, is not fed with foresight, softly petted with preparation, not pampered with planning .  Instead, a workaround is like having a wild boar, or even more descriptively, a griffin suddenly appear in your living room, hungry, flailing, snorting, and growling.  It’s unexpected, and you must deal with it NOW.  And it’s really the dealing with the griffin that is the workaround, not the griffin itself, although the imagery was just too good to avoid.

griffin5That’s what BP and Transocean and Haliburton and Cameron International (manufacturer of the Blowout Preventer) are facing now.  That’s why they’re calling in movie directors and engineers, and 25,000 workers to put together Top Hats, Junk Shots, Top Kills, and Slice and Caps.  There was less of a contingency than there should have been to deal with the impact.  Once again (and we’ve blogged about this), why wouldn’t the oil industry as whole (if not BP in particular) have had a fleet of the Kevin Costner -funded boats ready to clean up the spill to at least buy a little time?  That’s a form of contingency that would have kept the griffins at bay.

Now BP has said that it had a contingency plan, and it’s working – incredibly, they did actually say that, just a few days ago.  Read that story here.

Let’s wrap this unusual posting in the following way:

It’s worth it to put the time in up front in a project so that you really understand the risk factors (the probability multiplied by the FULL impact) of all of your risks, and it makes sense to put the time in up front on contingency planning on those risks.

For Earth Day: some videos to ponder

Earth Day is (at least in the US) 22-April of this year.

greg craven

Here at EarthPM we’ve actually found some entertainment and informative value in the following videos produced by physics teacher Greg Craven on climate change.

What’s intriguing about these videos is that they speak to familiar project management tools in Risk Management and decision-making which are applied here to climate change.  Not only are familiar tools used but a few new ones are introduced.  We really urge you to look a the two introduction videos, see below.

An introduction: Part 1

An introduction: Part 2

Did you like these?

Well- he has a series of 7 videos on Risk Management (tied to climate change), we provide links to the first three here:

Risk Management – Part 1

Risk Management – Part 2

Risk Management – Part 3 (of 7)

You can get the rest by going to his channel at YouTube. Or, you can visit Manpollo.org, a site focused on this work.

Oh, and we almost forgot.  Like us, Greg wrote a book.  You can find it here on Amazon.