Rethinking Risk Management – Why? Seeking Smart Solutions
The pandemic was the ultimate shock to the system for organizations, redefining how project leaders proactively plan for risks of any scale. But the need for teams to prepare for the unexpected persists. Amid geopolitical unrest and supply chain disruptions, concerns that organizational blind spots could knock projects off course remain front of mind.
According to the World Economic Forum’s The Global Risks Report 2022, 42 percent of business and government leaders believe volatility and surprises will reign over the next three years. And those threats can have long-term consequences.
Reducing the Element of Surprise! - Rethinking Risk Management
There’s also a need to drill down on existing risk mitigation efforts, says Yasir Masood, PMI-RMP, PMP, project and risk consultant, GleeYM, Toronto. Masood develops risk register supporting documents like mind maps, influence diagrams and decision trees. He also performs “What if?” analyses to assess different scenarios, particularly unknown risks.
“My goal is to keep the risk register simple and easy to understand by all stakeholders,” says Masood, who served on a committee this year to update PMI’s Risk Management Professional (PMI-RMP)® certification exam. “People try to add information to the risk register, and it creates confusion, particularly when the risk register is reviewed by the top management and people who are not directly involved. So my goal is to keep it simple and to the point so everyone in the organization can understand the language and context.”
Seeking Smart Solutions
AI and machine learning can be particularly helpful to assess risks for supply chain interruption and during infrastructure or environmental projects, Masood says. But he cautions project leaders to not blindly follow bots—they need to balance those insights against human input and analysis.
“Projects are for people and managed by the people,” Masood says.
While it’s good that AI and other tech tools are being used to maximize productivity and improve projects, many people who are change-averse get biased and try to find ways to make the technology fail, resulting in cost overruns and delays Masood says. Beyond that, AI can’t account for valuable feedback from major stakeholders who have the power to apply pressure that can either delay or stop a project. Software can help teams select a route for a pipeline or railway based on available data, but AI-driven decisions can be rejected or changed based on feedback from community members as well as government and regulatory bodies.
“Therefore, balance is important between people and AI while decision making,” Masood says.
Case in point: The European Space Agency says the planned 2022 launch of its first Mars rover will likely be delayed by at least four years after it suspended relations with Russia’s Roscosmos space agency, a project partner, because of Russia’s invasion of Ukraine. The postponement will also force scientists to wait for the mission’s ultimate payoff: critical research data. Meanwhile, supply chain barriers have slowed the launch of solar farm projects in South Africa. Potential project backers retreated amid the rising costs of shipping photovoltaic panels, putting on hold plans to build out more sustainable energy in the region.