risk identification in the vast Bering Sea
Risk identification is a longstanding, although often neglected, task in projects today. While project managers and teams work to identify risks, they frequently encounter barriers to the risk management process that promote this neglect, resulting in projects that are more prone to challenges in scope, time, and cost expectations. Using the Deadliest Catch television series as a backdrop, an experiment was conducted using working project managers to identify and understand common risk identification barriers. The results of this research are provided in this paper, including definitions, strategies, and tactics for working through the barriers, and suggestions for future considerations and research.
What keeps project teams from identifying risk? There are limitless project-specific scenarios that explain tactically why challenges exist for a given project. The limits for a specific project depend heavily on the culture of the company, the team members, the customer, the technical attributes of the problem at hand, and the economic conditions under which the project is being conducted. However, looking across projects, the nature of barriers to identifying risks can be generalized and specific strategies for managing through those barriers can be defined. Removing these fundamental barriers is a critical success factor for proper risk identification in projects. Project managers, project management office (PMO) organizations, and executives can then work to eliminate these barriers, thus enabling greater project success for companies.
Risk identification “is the process of determining which risks may affect the project and documenting their characteristics” (Project Management Institute [PMI], 2008, p. 282). A long-standing practice, generally accepted by the project management community, few would argue that it lacks importance. Even so, in project management literature, it is frequently overlooked in favor of more detailed discussion or examination of risk analysis and response-planning techniques. Specific project-level tactics are provided, but a strategic view of risk identification barriers for organizations is virtually nonexistent.
Consider several current examples popular in the project management community. In one classic work on project risk management, the author explains that “risk identification is about reviewing every input variable, activity, key material, and resource” (Schuler, 2001, p. 101). A more recent work tells us that risk identification is “a thorough homework exercise that allows the project organization to be prepared when adverse events strike” (Loch, Meyer, & Pich, 2006, p. 16). Both of these examples represent the attitude that risk identification is something that has to occur, but that it is more important to have sophisticated techniques mastered such that analysis can be performed should a risk be discovered. This is evident in the works themselves, as the vast majority of these focus on defining and discussing the analytical techniques. Another more recent work indicates a somewhat greater emphasis on the risk identification step, which “can be critical to project success,” and frequently “there can exist a desire for ignorance” (Koller, 2007, p. 47–48).
Fundamentally, this is an opportunity for enhancement of best practices, because the value of analysis and planning activities directly correlates with the degree to which risks are identified. In short, the project and the organization are unable to achieve value from great and sophisticated analysis techniques if the teams are unable to first identify risks. It is the purpose of this paper to outline common barriers to risk identification and to provide specific actions that project managers, teams, and organizations can take to enable successful risk identification.
To understand what keeps project teams from identifying risks, a focus group approach was employed during introductory risk management training classes conducted between 2006 and 2008. The approach included building small teams of project managers, numbering four to six, over a 3-year period. Approximately 40 of these focus groups were used, totaling almost 200 project managers. In the session, the teams were challenged to watch a montage of video clips from the Discovery Channel reality show Deadliest Catch, and to identify as many risks as possible in the time allotted. The video clip was approximately 10 minutes in length and the teams were given 15 additional minutes to work together to combine individual lists, discuss and brainstorm additions, remove duplicates, and count each team's results.
Deadliest Catch is a Discovery Channel reality television show based on Alaskan Crab fishing. Fishing vessels are followed and filmed performing the job duties associated with preparing, catching, hauling, and delivering crabs to commercial processors. The crab fishing season parallels a project closely in the sense that each boat initiates, plans, executes, controls, and closes a crab season. A team of deck hands (team members) and a Capitan (the Project Manager) work to catch as many crabs as quickly and as efficiently as possible. The television show is an engaging simulation of project processes, particularly in the area of risk management because the commercial fishing job is regularly one of the deadliest jobs in the United States.
The television show was used as a backdrop for the exercise and as an abstraction of projects, project teams, and the project environment in general. It is an effective learning tool, inasmuch as it has a popular culture element, provides a unique and entertaining simulation, and contains core elements of risk, response planning, and monitoring and control from the project risk management knowledge area. Leveraging the video, focus group participants are able to mentally separate the reality of their organizations and projects from the abstraction such that specific elements of risk management can be highlighted more easily.
While the response of participants to Deadliest Catch has been vastly positive, there is nothing unique about the television show requiring its use for this exercise. Any similar television program would serve as the abstract background for the simulation, where the individuals involved are performing (1) a real job/project, (2) presents a fast-paced, high-risk scenario, and (3) is separate from what the participants do for their day-to-day job activities.
Project Manager Focus Groups
The focus groups were constructed from risk management course participants and conducted during the delivery of the course. Project managers that were part of these focus groups were from the public and private sectors, including government, energy, manufacturing, aerospace, financial services, retail, and others. Class sizes were typically between 10 and 20 people, with focus groups averaging approximately four. Courses included both public offerings as well as custom on-site learning programs. Experience levels varied, from individuals just entering the project management profession with 0 to 2 years of experience to experienced project managers with upwards of 30 years of experience. The exercise was conducted after approximately 4 hours of instruction introducing project risk management basic concepts and risk planning techniques.
The results of the experiment varied greatly, from ten or fewer risks identified to in excess of 100. Based on the exercise, the question of what prohibited the team from identifying risks is posed, and a listing of the risks is captured. By repeating this exercise over time and with different focus groups, a common list of barriers is presented and serves as the key finding of this paper. While identifying the reasons that teams have difficulty naming risks, it serves as a listing of critical success factors for teams. This is a critical step because without effective identification, additional analytical and planning activities cannot be undertaken to their fullest.
The risk identification barriers most frequently identified are presented in Exhibit 1 and discussed further in the remainder of this paper. It is a summary of the common themes identified by the focus groups, with a slight variation in context. These barriers are listed alphabetically, not necessarily in the order of frequency, nor does the order necessarily imply priority or importance. A brief elaboration of each barrier is provided, as well, for quick reference and clarity.
Exhibit 1: Ten common barriers to risk identification for project teams.
Risk Identification Barriers
Focus groups used to identify risks in the experiment frequently suffered trying to balance the quality element of identified risks. When focus groups referred to the lack of quality in identified risks, it was in reference to balancing the precision versus the accuracy of any particular risk statement. The root cause of concern was having a risk identified such that it would be actionable in some way. To work through this barrier, a framework was necessary to guide a team to test the risk item. The SMART framework, a common mnemonic used throughout management for goal setting, was highlighted as a method to address this quality problem, where each risk should be Specific, Measurable, Attainable,, Relevant, and Time-bound. Applying this framework as a testing method for quality risk items generally clarified those items and their quality was addressed to the satisfaction of the teams involved.
The inability to anticipate possible events and outcomes, frequently characterized as a limit of imagination by focus groups, was cited as a pervasive obstacle. The ability or inability of team members to visualize reasonable potentialities within any project execution and how this limited focus groups’ abilities to identify risks was one common identified barrier. A common dynamic was the desire of focus group participants to balance far-fetched and highly improbable potential outcomes with well-reasoned and logical results where relevant project risks could be identified. To address this barrier, proper ground rules for risk identification during the exercise must be defined at the onset of sessions. For example, conducting a facilitated brainstorming session is a common technique for risk identification (PMI, 2008, p. 286). Historically, the ground rules for a brainstorming session are constraints for the team by design, articulated in advance of the session to specifically control and guide a team of people through the effort. Ground rules that bind the team, without limiting its creative capacity, are key to promoting the free flow of ideas such that all appropriate ground is covered.
Inadequate Planning Approach
The nature of the experiment specifically limited the amount of planning time allowed for the focus groups. Two specific elements were noted that specifically limited the ability of teams to be effective and efficient in the experiment. The first was related to the organization of roles and responsibilities. With short notice and limited time allocated to planning, teams struggled to identify an overarching approach. The second limiting element was the problem of not having a good risk breakdown structure. Teams that quickly identified the categorization system relating to the specific experimental problem were able to complete their analysis of situations and scenarios much faster and accurately than teams that did not. Focus groups that developed a strong risk breakdown structure were better at focusing their energy and moving forward in the exercise. For both elements, developing a strong framework and agenda with supporting risk breakdown structures were noted as essential elements to overcoming this barrier. In this case, the risk breakdown structure was used as a proactive guide to help a team focus in the risk identification process rather than a categorization system applied after the fact or derived from the raw material of the session.
Lack of Knowledge
Having the appropriate subject matter expertise was a specific limit to risk identification. Using the Deadliest Catch example, the job is purposefully unique; for example, it is highly unlikely a focus group participant would have specific Alaskan Crab fishing experience. There have been occasions where participants have had tangential experience. Examples include sailing experience, mechanical experience, sport fishing as a hobby, and job assignments directly impacted by incremental weather. In these cases, teams that had one or more interests related to the example had indirect subject matter expertise that enabled the logical derivation of understanding the uncertainties associated with the example itself. The lack of knowledge was frequently highlighted as a limit, and this inequity in team composition further demonstrated this important point. Project managers, charged with assuring the process of risk management, may or may not be technical subject matter experts. Successful risk identification is contingent on including the right participants in the identification process. Project managers can remove this barrier by identifying the proper stakeholders and by assuring their inclusion and participation in the risk identification session.
Lack of Management Support
In practice, lack of management support is one of the most critical barriers, but in the exercise this was less obvious to participants. The role of the class facilitator creates the illusion of a management role. By virtue of time-boxing the exercise and refusing requests for additional information or clarification, the facilitator/manager serves as an uncooperative authority figure simulating an unsupportive management role for the project. As the participants identified, having a structured and supportive manager in the project team's hierarchy is important so that the proper allocations of time and cost are in place and the appropriate priority is applied to the activity. It was noted that often the manager may or may not value the activity, and in this case, the teams struggle to sustain engagement in the activity. To remove this barrier, it is up to the project manager to understand the degree of management support for the activity, to work to gain buy-in early in the project's life, and to clearly establish the importance and priority with the leader through clear communication and roles and through responsibilities review.
Level of Detail
Achieving the appropriate level of detail—not too much detail and not too little—consistently challenged the focus groups. Teams struggled to identify whether they were digging too deep or thinking too broadly about the risks. In particular, teams were concerned about the amount of management overhead that they were creating for themselves rather than focusing on identifying the specific risks that needed to be managed. Achieving a fair and balanced identification process, by which the most important risks could be identified and which could be realistically managed, was the goal. Teams recognized that, because the exercise subject matter was typically foreign to them, it could be exacerbating their anxiety. The teams noted that mitigating factors of having additional subject matter experts available, familiarity with the problem in general, and other support mechanisms at the workplace would alleviate some of the effects this barrier, but that this barrier would, however, remain a challenge. It was noted that applying the SMART framework, or a similar clarifying management framework, would address the resolution of these challenges regardless of familiarity or experience with the project nature. Further, providing baseline examples of the level of appropriate detail would give the team specific points of reference for identification purposes.
One critical barrier that was identified strongly reflected patterns and behaviors in the workplace. In the exercise, teams are given one viewing of the video montage and then given some group time to discuss it and brainstorm. Teams realized that having more than one observation or review of the project subject matter would greatly enhance their abilities to identify risk items. Participants noted that, due to time or cost constraints, there was only one opportunity for reviewing the project for risks, similar to the situation often seen with a real project. This problem frequently exists in work environments where there is weak project support infrastructure and lower maturity in terms of project management practice. Teams recognized that the iterative and continuous nature of risk management—in this case, the risk identification activity itself—would rectify this problem, however pervasive it is in practice.
Teams discovered basic influences of risk attitude and its role in risk identification. Typically, more risk-adverse team members identified more risks, and more risk-tolerant team members tended to identify fewer risks. Additionally, risk-adverse team members were more inclined to explore the detail of scenarios, to go “deeper” into potential problems, whereas risk-tolerant team members pushed their teams to articulate risk more broadly. This dynamic illustrates “that an individual's attitude to uncertainty will have a significant influence over what is perceived to be a risk” and when given the same set of facts, these individuals “will not identify the same set of risks” (Hillson & Murray-Webster, 2007, p. 22). Furthermore, it was noted that the attitude of supporting management team members toward risk may further complicate risk identification activities, where a particular manager's risk tolerance or risk adverseness can influence the priority and resources applied to risk identification activities. Specific management of this barrier relates strongly to communication activities where awareness of attitudes, both with team members and management members, will help resolve this barrier. Conducting a specific exercise at the beginning of a project or an identification session such that others understand the relative risk attitude of each will enhance the effectiveness of the session, avoiding potential in-fighting and confusion.
Time and Cost Constraints
The exercise is time-boxed, and teams are limited in their interactions to work only within their restrictions. No additional time or resource is permitted. This simulates real projects in the sense that deadlines and finite budgets do not allow for uncontrolled risk identification sessions, and instead time and budgetary pressures are placed on the teams with these constraints. Teams recognized these limits and highlighted the importance of adequate planning to alleviate the challenges. A strong identification schedule of recurring events with a well-done risk breakdown structure provides input into planning such that expectations can be managed in terms of time and costs required. Teams could leverage these planning tools to further influence the establishment of these constraints, mitigating the impact on the team. This requires investment in the planning process in advance of starting the identification process, where appropriate planning meetings are conducted such that “high-level plans for conducting the risk management activities are defined” (PMI, 2008, p. 279).
Too Many Assumptions
Teams repeatedly noted the volume of assumptions they were making in the course of determining the risks associated with the exercise. This highlighted for team members that teams working together to identify risks make a great number of assumptions in the identification process, such that project and risk plans have natural failure points, where assumptions may prove false. Too many assumptions called into question whether or not sufficient knowledge or resources existed to allow well-informed decisions to be made. Due to the team members’ relative familiarity with real project work, this demonstrated that a great deal of information is frequently taken for granted in organizations. Teams noted that a level of objectivity needed to be applied and that appropriate assumptions needed to be listed and tested to address this problem; furthermore, it was noted that for this to truly be effective, teams must document assumptions from the outset and continuously test these assumptions as more project information was discovered.
Cross-over exists between many of these barriers or limits to risk identification. Root cause analysis would need to be performed to assure that the proper barrier is identified such that the proper technique is brought to bear. For example, there is a strong relationship between the lack of knowledge barrier and the level of detail barrier. Additionally, some of the solutions for addressing these barriers alleviate multiple barriers. For example, applying the SMART management framework will address both identification quality and level of detail. Further, there is significant interplay between lack of management support and risk attitude, where communication exercises, expectation setting, and raising general awareness will help, but do not necessarily remove the barrier. These interrelationships imply that there are efficiencies to gain in addressing these in practice, where the project manager can conduct critical thinking and analytical exercises to understand, proactively plan, and deliver risk identification as effectively as possible.
In addition to the project manager's role in this identification process, there are implications for PMOs or other governance/oversight entities within the organization. Considering the barriers to risk identification at the enterprise level provides for the opportunity to: 1) develop enterprise-wide tools, techniques, and methods to enable project managers working to remove barriers and, 2) influence culture evolution, where normative factors may create naturally reinforced barriers for project managers working to have the strongest risk identification processes appropriate for the project. Governance and oversight committees or teams can further reinforce the importance of the process by supporting the activity to its fullest, ensuring participation, supporting resources, and promoting priority for project teams responsible.
Lastly, each barrier, when presented individually, is very clear, and the action or actions for working through the barrier are relatively straightforward. Techniques and tools presented are typically reusable items, valuable throughout the project lifecycle, and are elements of the project that would be produced regardless of considering the barriers. However, when taken together, the barriers to risk identification become a perfect storm of obstacles that can triangulate to create undue risk assumed for projects in organizations. Understanding the barriers and breaking them down into single items against which action can be applied, is the critical step in the risk identification process.
Hillson, D., & Murray-Webster, R. (2007). Understanding and managing risk attitude (2nd ed.). Burlington, VT: Gower Publishing Company.
Koller, G. (2007). Modern corporate risk management: A blueprint for positive change and effectiveness. Fort Lauderdale, FL: J. Ross Publishing, Inc.
Loch, C., Meyer, A., & Pich, M. (2006). Managing the unknown: A new approach to managing high uncertainty and risk in projects. Hoboken, NJ: John Wiley & Sons, Inc.
Project Management Institute. (2008). A Guide to the project management body of knowledge (PMBOK® Guide)—Fourth edition. Newtown Square, PA: Author.
Schuler, J. (2001). Risk and decision analysis in projects (2nd ed.). Newtown Square, PA: Project Management Institute.
© 2009, Larry Winters
Originally published as a part of 2009 PMI Global Congress Proceedings – Orlando, Florida
This standard focuses on the “what” of risk management, including: core principles; fundamentals; and life cycle.