Risky business – Senior Consultant Chris Finnegan considers project management and evaluating risk.
After attending the Grand National and experiencing first-hand the adrenaline and excitement involved in horse racing, I started thinking about what motivates us to take a gamble even when the odds are stacked against us.
Typically, I shy away from betting. Somehow it just doesn’t attract me. In fact, I spent a whole week in Las Vegas, and didn’t even take one roll of the dice or a pull on a slot machine!
Logic in these instances seems to prevail, with my main line of thinking being that the very fact that casinos (and the entire gambling industry) exist is because they are making a profit… so why on earth would a novice with no experience of gambling think he could win?
But what if you did win? What if you somehow gained the golden touch and began a winning streak? The Grand National was my day.
Choosing horses with no logic other than you like the name or colour of the jersey seemed to be my winning formula. However, I entered every new race with a negative mindset, assuming that I couldn’t possibly win another, and placing cautious and conservative bets.
I left the race track with far more cash than I had gone with, but just think how much better it might have been if I had approached the day with a positive mindset. I would have been walking away with very heavy pockets!
This experience made me re-think the whole concept of risk and why we could view risks as opportunities. For example – let’s say there is a risk that services or materials may increase in price, and therefore may impact project budgets. If you flip this on its head, there is an opportunity that the price may decrease and, therefore, may positively impact project budgets.
Risks aren’t necessarily bad; they can sometimes work to your favour, and it’s important to factor this into any risk register. Here are some of my recommendations:
- Identify the risks and opportunities – ensuring that opportunities are also captured, so a complete picture of the situation can be assessed.
- Evaluate the probability – if a risk is highly unlikely to happen, then why invest time into managing it?
- Evaluate the severity – if a risk holds very little impact to the project, why invest time into managing it?
- Create contingency plans – while textbooks advise that you should have a Plan B for every eventuality, the reality of project management is that you need to prioritise your Plan Bs based on all the above factors. You often don’t have time to contingency plan for every risk, so concentrating your plans on the risks that are most likely to happen or pose the biggest impact to the project is key to using time wisely.
Remember – when things go wrong, there is usually a way to fix them. In fact, the most creative solutions are often found when there is seemingly no way to fix a problem!
On a final note… next time you’re at the races, take a moment to think about this blog, and you might find yourself winning big!