Category Archives: Risk Management

Crisis Projects: Project Management Implications

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Crisis Projects: Project Management Implications

  1. Leader of the Crisis Team

  • Rare that a project manager leads a crisis team.

  • Decisions made are not the usual decisions made by a project manager.

  • Project sponsor will assume dual role and be leader of the project team as well.

  • Leader of crisis team will have complete authority to commit corporate resources to the project.

  • Project manager, as we know it, will actually be an assistant project manager.

  1. The Crisis Committee

  • Composed of the senior-most levels of management.

  • Should have multi-functional membership.

  • Project managers and assistant project managers report to the entire membership of the committee.

  1. Crisis Communications

  • Leader of the crisis team will be the primary spokesperson; responsible for all media communications.

  • Media cannot be ignored and has the power to portray the company as victim or villain.

  • Senior-most levels of management especially executives with professional communication skills must perform crisis communication with the media.

  • Corporation should speak with one voice. Be swift, honest, compassionate, open, sincere in responding to the victims and their families.

  • Information must not be withheld. It may be considered stonewalling.

  1. Stakeholder Management

  • Identify all parties affected by the crisis.

  • Each stakeholder can have different interests namely, financial, medical, environmental, political or social unrest.

  1. Assume Responsibility

  • Company must accept responsibility for its actions (or inactions) immediately , and without being coerced into doing so.

  1. Response Time

  • Usually a small window of opportunity where quick and decisive action can limit or even reduce the damages.

  • The media views quick response favorably.

  1. Compassion

  • Respect for people mandatory irrespective of who was at fault.

  • Emotions of victims and their families expected to run high.

  • Public expects company to demonstrate compassion.

  • Be on the scene of the disaster as quickly as possible.

  • Delay may be viewed as lack of compassion or , even worse, that the company is hiding something.

  1. Documentation

  • Decisions need to be clearly documented for legal reasons.

  • Project manager and associated team members should possess strong writing skills.

  1. Capture Lessons Learned

  • Capture lessons learned from both internal and external crises.

  • Examine risk triggers, develop risk management templates and a corporate credo.

Source: Project Management: A Systems Approach to Planning, Scheduling and Controlling by Harold R Kerzner (11th edition).

 

Risk Interdependencies

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Action Possible Benefit Risk
Work overtime Schedule compression More mistakes; higher cost and longer schedule
Add resources Schedule compression Higher cost and learning curve shift
Parallel work Schedule compression Rework and higher costs
Reduce scope Schedule compression and lower cost Unhappy customer and no follow-on work
Hire low-cost resources Lower cost More mistakes and longer time period
Outsource critical work Lower cost and schedule compression Contractor possesses critical knowledge at your expense

Source: Project Management: A Systems Approach To Planning, Scheduling and Controlling by Harold R. Kerzner

Response Options for Risks and Opportunities

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Summary of Response Options for Risks and Opportunities
Type of Response Use for Risk or Opportunity Description

Avoidance

 Risk Eliminate risk by accepting another alternative, changing the design, or changing a requirement. Can affect the probability and/or impact.
Mitigation(Control) Risk Reduce probability and/or impact through active measures.
Transfer Risk Reduce probability and/or impact by transferring ownership of all or part of the risk to another party, use of insurance and warranties, by redesign across hardware/software or other interfaces, etc.
Exploit Opportunity Take advantage of opportunities.
Share Opportunity Share with another party who can increase the probability and/or impact of opportunities.
Enhance Opportunity Increase probability and/or impact of opportunity.
Acceptance Risk and Opportunity Assume the associated level of risk or opportunity without engaging in any special efforts to control it. Budget, schedule, and other resources must be held in reserve in case the risk or opportunity is selected.

Source: Project Management: A Systems Approach to Planning, Scheduling, and Controlling.

by Harold R Kerzner.