Have you ever stepped in dog poop? Well, of course you have. Everyone has or will at some point in their lives. When it happened to you, did you swear it will never happen to you again? If it happened once it will likely happen again. Can it be avoided at all? Can you PLAN not to step in dog s**t?
A good project plan defines what will be done and when. A good risk avoidance plan should define what won’t happen and how.
The key question for every risk is: “can it be avoided”? If an action is risky and a repeat of it can potentially put you in real danger, you must think what can be done to make sure it will not transpire in the first place.
Let’s delve into a new method called “Backward Risk Calculation.” This may help with the opening example, and will surely help save your project from going off the rails.
Backward risk calculation
As the name implies, this method suggests that each risk event is preceded by another event that ultimately leads to the risky event. If we can avoid the preceding event, we will not enter the risky state in the first place and the risk will be avoided. The preceding event serves as a line of defense – and we will draw it later. This method can be reiterated for the preceding event that precedes the preceding event and so on to the point of high level risk avoidance.
It may sound hard to accomplish, but with practice, it can become a very useful tool. Let’s use our dog poop example. What was happening before you took the fateful step? Maybe it was your glance at a good-looking man/woman across the road, or a distracting phone call you were on. Maybe you were simply gazing at clouds instead of looking down to mind where you are walking. So, we see, the preceding event in our story is you not watching where you walk!
Of course! I didn’t look down – amazing how simple it seems in hindsight. As da Vinci said, “simplicity is the ultimate sophistication. This method, through its simplicity, can help prevent a few headaches for a project manager.
Once the preceding event is identified – “not looking down” – you can start to pay more attention and avoid it. With this preceding event, there is some room for failure, because unless you are very unlucky, most of the time, failure to look down will lead to nothing.
Applying Backward Risk Calculation in project management
Defining the risk in a project plan can be easy. It can be a vendor who is late without notice; an activity done for the first time or a known technological challenge. While defining the risk is quite easy, handling it can be very complicated. It’s like driving downhill on a slippery slope – even if most people can identify the risk, actually avoiding it requires more skills.
Backward Risk Calculation can greatly help avoid risk. Let’s go back to the vendor who is late without notice. What precedes the event in this case? Maybe if we employ weekly progress meetings at the vendor’s site we will know about the delays in real time? Taking this step will draw our line of defense and we can shift the location of the risk itself to this point. If the meeting doesn’t take place on schedule, we should consider it a risk materializing and must reschedule the meeting to avoid the new risk. By applying Backward Risk Calculation (BRC) we have reduced the probability of occurrence of the “delay without notice” risk.
Backward Calculated Risk and traditional risk handling methods
Traditional risk avoidance defines a basic avoidance activity (how can we prevent the risk) and a mitigation plan (what will we do if the risk happens).
This traditional method can work perfectly with Backward Risk Calculation as long as it is assigned to the Backward Calculated Risk and not just for the risk itself.
Back to our vendor and new risk plan, namely the “weekly meeting at the vendor’s site”
Avoidance plan: schedule the meeting on a regular day/time every week, send a detailed agenda and reminder two days in advance, ask the vendor to assign a focal point. Call him on this focal point a day ahead of the meeting to make sure it happens as scheduled.
Mitigation plan: reschedule for the same week, if that’s not possible, call the department manager in real time and notify him about the cancellation. Ask the vendor to cover the travel costs. (since costs always require management approval, they are a great escalation tool).
Looking at this plan, and considering that we follow it carefully, what is the probability that the weekly coordination meeting wouldn’t happen? I think we can agree that the probability is fairly low. I’m also guessing that after the vendor receives a couple of reminders and phone calls from us, he will realize there is no way to avoid us.
Risk controlled? Check. Great work! By now you have probably forgotten that the meeting was not the real (first) risk. The vendor’s delay without notice was the initial risk. If we don’t skip the scheduled meetings – the initial risk simply cannot transpire. We managed to kill the risk!
Take a look at the other two examples of potential risks mentioned above (activity done for the first time or a known technological challenge), and see if you can figure it out yourself. How would you prevent the risk from actually transpiring? In both cases, a line of defense can be created to precede the real risk. Handling it as the risk itself will significantly lower the probability of real failure.
So, is the dog dung avoidable?
You can now go back to your project map and go over the activities YOU defined as risk. Backward Risk Calculation with an action plan for each risk will put your project in a totally different place. Now you are able not only to define what will happen in the project, but also what won’t happen in it.
If you looked down, you should now look up with pride, you made it, no dog poop… this time!