Project risk management has been evolving rapidly. It is now being reframed in a number of important ways, with widespread repercussions for everyone involved. For example:
- A threat focus has become an ‘opportunity’ focus, with a view to taking more risk to improve profit expectations and to support further optimisation to improve ‘value’. Opportunities to make better decisions whether or not we are lucky is now a central concern.
- Multiple pass process emphasis has led to the development of simple ‘minimum clarity’ first pass approaches to size uncertainty prior to deciding whether or not further action is required. These are now challenging conventional ‘simple’ approaches, like probability impact graphs, making all approaches based upon them demonstrably redundant.
- Adding complexity to the analysis structure whenever doing so is useful, facilitated by a clear understanding of ‘maximum clarity’ approaches, is now challenging basic decision analysis, portfolio theory and discounted cash flow economics received wisdom.
- Building proactive uncertainty management into capital investment appraisal, bidding and contract design is increasingly seen as fundamental. Good governance associated with very difficult decisions involving loss of life and environmental disasters is now being addressed.
Good management of project opportunity and risk cannot be achieved by adopting any simple off-the-shelf techniques. It needs careful thought, effort, a sound general conceptual framework and the recognition of key issues in each individual case. This course provides the basic concepts and tools.
Capitalising on the experience of course participants and sharing experience will be an important aspect of group sessions. Group sessions will also allow participants to confront difficult practical issues.
Plenary sessions will draw on the re-titled and extensively re-written third edition of a highly regarded book which the course instructor co-authored – “How to Manage Project Opportunity and Risk”, and copies will be provided for course participants.
As a participant you will learn to:
- Understand the concepts of a “clarity efficient” uncertainty management approach. Not being simplistic, allowing the introduction of further complexity whenever this is worthwhile, is crucial. So is avoiding framing assumptions which are restrictive. Obtaining unbiased estimates is one useful example context.
- Persuade colleagues to abandon widely used counter-productive concepts and tools. Understand why some “common practice” is not “best practice”, such as the risk management (probability-impact) matrix.
- Sell uncertainty management in terms of the benefits which can be provided by the new processes and perspectives. How to clarify why new ideas are useful is crucial.
- Embed the new processes and concepts in an organisation, and how to avoid the problems involved. Encourage everyone to ask the right questions and ensure decisions are approximately right rather than precisely wrong, with everyone motivated to seek the same objectives.
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of Management Science
in the School of Management
of the University of Southampton and
of The Nichols Group,