Episode 346: Weight Loss For Risky Projects (Free)
This episode is sponsored by The Agile PrepCast. PDU for PMP::
This interview with Dr. David Hillson was recorded at the 2015 PMI Global Congress in Orlando, Florida. We discuss his paper and presentation "Weight Loss For Risky Projects". Here is the paper's definition of Risk Obesity:
“Risk obesity” occurs when there is too much risk in the system, resulting from uncontrolled risk appetite (Hillson, 2014). This can affect the business as a whole if strategic risk-taking decisions by the senior management team lead to risk exposure that is greater than the organization can manage. But risk obesity can also occur at the project level, when a particular project is carrying levels of risk that are too high, posing a significant threat to the project’s success.
Each of the characteristics of physical obesity has parallels in risk obesity, where we accumulate excessive risk exposure that threatens the ongoing health of our project, and that may ultimately be terminal. Risk obesity also makes other risk ailments more likely, as high levels of risk exposure challenge the ability of our risk management processes to cope.
The main cause of risk obesity is an uncontrolled or inappropriate risk appetite (Hillson and Murray-Webster, 2012), leading us to take on too much risk without the ability to digest it and deal with it effectively. It is also possible in some cases that there is a built-in tendency to risk obesity arising from the “organizational DNA,” with a corporate ethos and culture that lead to excessive risk-taking.
The good news for projects suffering from risk obesity is that it is both treatable and preventable. This paper provides clear diagnostic symptoms to determine whether a project is risk obese, as well as proven treatment options.
Cornelius Fichtner: Hello and welcome back to the Project Management Podcast at www.pm-podcast.com. We are coming to you live from the PMI 2015 Global Congress in Orlando, Florida. Disneyworld is here. We are in the Exhibit Hall and maybe you can hear it in the background, the exhibitors are starting to take down the tables. With me is Dr. David Hillson. Good afternoon, David.
David Hillson: Hello, Cornelius. Nice to be with you again.
Cornelius Fichtner: Thank you. It's seems like you're doing a lot of these every congress.
David Hillson: Well, I've got lots of things to say and you want to hear about them. So I'm very pleased about that. Thank you.
Cornelius Fichtner: Yes. One thing I really want to hear you talk about is future trends. What do you see ahead of us for project managers?
David Hillson: I'm worried about the future trend because in a number of professional associations and in a number of publications and journals, I see an increasing emphasis on the project manager taking a business role or a strategic perspective and lifting their gaze above the project and concentrating on business value and managing senior stakeholders and creating value for the organization. And what worries me is that this is not the business of managing projects. This is the role of the project sponsor, the role of the organization. Managing projects is a tough call and we need people who are project managers to focus on delivering deliverables, to creating the ability to generate benefits and value through the outcomes of our projects. And it just worried me that organizations are encouraging their project managers to lift their sites and lose focus on the actual management of projects.
Cornelius Fichtner: Interesting. That is an interesting counterpoint to everything that PMI seems to be doing at this point.
David Hillson: Oh dear. And I'm a PMI fellow-
Cornelius Fichtner: Yes. I know. With the Talent Triangle, the focus is really understanding business, understanding leadership. Lift yourself up, become more than a mere "project manager" and you're saying we might be leaving a void down there where projects get actually managed.
David Hillson: How condescending to talk about a mere "project manager".
Cornelius Fichtner: Yes, I know. I know.
David Hillson: We are the people who change the world. And the other thing is how many roles are there for project sponsors and business thinkers and strategists? Not very many. How many projects are there that need effective and competent project managers? Millions. So if we encourage every project manager to be a strategic business thinker, they're all going to be aspiring out of the space where we actually have a role to perform and will end up with everybody wanting to be a business manager and nobody wanting to manage projects. So it is a trend, I do see PMI and other organizations going that way and it worries me.
Cornelius Fichtner: All right. And I guess that is going to be a discussion for another time.
David Hillson: I see.
Cornelius Fichtner: I think there's a lot of value and discussion in that point. But now to your paper. It is titled Weight Loss for Risky Projects. I know why you're interested in risk. You're known as the risk doctor. But why weight loss, why this particular focus?
David Hillson: Well, the doctor concept allows us to use the medical metaphor and analogy, a picture of something that's medical to help us understand something related to the world of risk and in this case, risking projects. And so, what I've been doing recently is thinking about common risk ailments. Using medical pictures, things like depression, things like blindness, things like shortsightedness, for example, which gives us a clue into some of the particular problems people have with managing risk in projects. And so in one of those common risk ailments that I've been discussing in this paper is the question of risk obesity. And risk obesity I think is a common problem and we'll talk about what it is in a moment. But the way to tackle obesity, there are two ways, one is to lose weight and the other is to change your risk taking habits. And so the title. Weight Loss for Risky Projects, it’s saying that a project that takes on too much risk, we could describe that as Risk Obese and so what we need to do is to lose weight to reduce our risk exposure to a manageable level to give our project a better chance to succeed.
Cornelius Fichtner: All right. And at this point, I think it's a good moment where we go straight to the end of your paper where you have a disclaimer and you say that the use of physical obesity as a metaphor in this paper is intended to be illustrative only and it's in no way meant to deny the reality of the genuine condition or to belittle or undermine the challenges faced by those who suffered from it. We also want to get that across here quite clearly. So what then is this metaphor of risk obesity?
David Hillson: So where obesity is an accumulation of excess body fat, risk obesity is an accumulation of excess risk. Where obesity says if we take on too much body fat, either through excessive food intake or insufficient exercise or possibly through genetic pre-dispositioned or some genetic factors, it can be bad for our general health and ultimately, it could be terminal. It could shorten your life expectancy. The same is true with the project. If we take on too much risk, more risk than it can handle, through either taking on too much risk or not managing it effectively, it can open you to other problems and could ultimately be fatal or terminal for the project because we have so much risk that in the end the project can't survive.
Cornelius Fichtner: What other problems would you see that are at the top of your mind?
David Hillson: For a risk obese project?
Cornelius Fichtner: Yes, for a risk obese project.
David Hillson: Yes. So for an obese person, we're talking about you know, heart attack, coronary heart disease. We're talking about Type 2 diabetes and so on, osteoporosis. For a project that's taking on too much risk, there's a number of things that it can lead you to. So one of them we might think about being inflexible. Again, that has a kind of a physical analogy as well. So if something new comes along, the situation of your project changes either a change in the scope or a change in the project context or the change in somewhere in the team. If we're already overburdened with so much risk that we're trying to manage already and something changes in the environment or within the project, then we can't respond to that quickly enough and it very quickly spirals out of control. So excess risk stops us responding to new risk. It makes it very hard for us to be flexible and resilient when things change as they always do on projects.
Cornelius Fichtner: What are the symptoms of risk obesity?