Risk management--lessons learned from the three stooges
What does Risk Management have to do with the Three Stooges? A lot! The Three Stooges are classic examples of all phases of the Risk Management process. Through their antics may be a bit unconventional, they provide an excellent example of good Risk Management principles. We all thought them to be real stooges, but underneath the surface they provide great examples of true Risk Management experts.
Probably one of the most misunderstood and underutilized aspects of Project Management is the field of Project Risk Management. A Guide to the Project Management Body of Knowledge (PMBOK® Guide) provides a clear definition of risk management terminology and an outline for us to follow in the implementation of a risk strategy. By coupling the structure of the PMBOK® Guide with lessons learned of true risk managers, the Three Stooges, we have a good starting place to implement risk management into our organizations.
Project risk as defined in the PMBOK® Guide as “an uncertain event or condition that, if it occurs, has a positive or negative effect on a project objective.” Uncertainty is a lack of knowledge surrounding an event. In our attempts to better understand and manage risk on our projects it is important to obtain appropriate information to reduce uncertainty on projects. The task of the project manager and the project team is to identify the risks for a project, categorize, properly assess them, decide upon a strategy and monitor the project for risk events to occur. Our project team today consists of Larry, Moe and Curley, with Curley leading out with the Nyuk, Nyuk, Nyuk—Hey Moe! and But Soitanley. It is much too easy to set back and accept the risk, but the consequences can be disastrous. Let's take a proactive stance and follow the Three Stooges through the process of properly managing project risk.
Episode One—“Grips, Grunts and Groans” (1937) or How to Approach Risk Management Planning
In episode one we find the Three Stooges faced with potential disaster when the wrestler they are to watch over gets too drunk to fight. Using the Stooge risk planning tools the threesome come up with a plan to substitute Curley for the fallen wrestler. With a plan in place on how to approach risk these sage project managers apply a number of strategies to address the risk of the project. They choose to send Curley into the ring to face impossible odds. Armed eventually with wild hyacinth perfume (the smell throws Curley into a wild frenzy), Curley is able to properly plan for risk and overcome his wrestling risk.
With inputs such as a project charter, a risk policy, a clear definition of roles and responsibilities, and understanding of the sponsors risk tolerances, and the work breakdown structure in hand we are ready to set out in establishing a plan on how to address risk in our projects. As we understand the purpose of the project by virtue of the project charter, we are able to begin to look at a strategy in how to address risk for the life of the project. It is also important to have a clear understanding of the level of risk the sponsor of the project is willing to take. In the case of “Grips, Grunts and Groans” the wrestler's manager bets a large sum of money on the outcome of the sure to win wrestler. His risk tolerance was extremely high as was his risk policy. In his mind there was a complete understanding of roles and responsibilities, of course unknown to his was the fact his wrestler was out cold. The WBS was laid out well also. The Stooges were to watch over the wrestler, keep him sober and get him to the wrestling match. Unfortunately there were a few change requests that came in the form of too much booze and a few misplaced dumb bells that also landed on the wrestler's head.
Nevertheless, the Three Stooges put a plan in place. Utilizing a series of planning meetings, “huddle,” a planning strategy was put in place to allow the project to move forward. Curley, an amazingly good likeness of the wrestler is substituted for the championship match. The output of the process was a Risk Management Plan. The plan outlined how risk on the project would be managed. It provided the necessary methodology for the match. There was a clear definition of roles and responsibilities of who would be doing what in the risk planning process. A budget was in place for the project risk assessment via the wrestler's manager. He guaranteed the Stooges $100 if the wrestler won, which was also reinvested in the form of a bet on the outcome of the match. What a good ROI for the risk assessment budget! A schedule was put in place for the risk assessment, though somewhat hurried by the looming match. Scoring and interpretation of the risks were established as well as appropriate thresholds, in this case a “pin” on the mat. Reporting formats as well as a risk tracking system were agreed to so all would know how the risk would be monitored. This came in the form of a referee, a timer and each corner manager for each wrestler. The wrestler manager would also monitor the project risk, of course having a vested interest in the fight outcome.
With Curley being “mordered,” as Moe describes, the project is rescued by a woman putting on wild hyacinth perfume that Moe used to stimulate the success of the project by splashing a little into Curley's face. The results are the rescue of the project by smart risk management techniques and of course the development of a classic Risk Management Plan. Curley is the winner of the match as well. He also continues to bong everyone over the head with the ring bell until no one is awake at the end of the project, including Curley.
Episode Two—“Three Dumb Clucks” (1937) or How to Perform Risk Identification
In our ongoing effort to refine the risk management process we enter into episode two—“Three Dumb Clucks” or how to properly do Risk Identification. “Till death do us part” takes on a new meaning as the Three Stooges try to prevent their father (who recently became a millionaire and left their mother) from marring a gold-digging young floozy whose friends plan to kill him after the wedding. Risk identification takes on new heights as the Stooges determine the risks that might affect their project and clearly document the characteristics of the risks.
The Stooges set out to include the project team in the identification of risks. They also include other key members of the risk management team such as subject matter experts, customers, end users, and outside experts in the risk identification process. As the story begins they find themselves in jail. They solicit the help of jail guards as part of the risk management team to help them identify the potential risks. They look at project planning outputs to assist them in the identification of risk. This includes a review of the project charter, which was sent to them from their mother. It simply states: your father divorced me, he is now a millionaire and you need to stop him from marring a young floozy that wants his money. They determine the potential risk categories, which includes technical, project, organizational, and external. After a quick review of the project's WBS and schedule, the Stooges begin to identify the risks on the project. This is followed by drilling holes in their prison wall and using Curley as a battering ram to break free.
After completing a documentation review of project plans and a reassessment of constraints and assumptions the boys begin to get a clearer picture of the risks. The risk identification process continues as they begin to implement information-gathering techniques. Using a series of brainstorming techniques, interviews and a quick SWOT analysis they are able to assess the risks for the project. Their father (really with sideburns) is indeed planning on marring a young woman and they are bound and determined to stop him. Even trying their influence diagrams on him to look at the causal influences of the young dame, they are still not able to sway pops back to mom.
Overhearing the dame's friend's plans to due in pop after the wedding they now have a clear understanding of the main risk on the project. The risk trigger will be the wedding and the risk event will be the untimely demise of pop following the wedding. Other risks will be that the boys loose their inheritance and mom is left out in the cold. Pop will just be cold.
With the risks clearly identified the Stooges accidentally run into Pop's soon to be bride. The girl mistakes Curley for his dad and whisks him off to the wedding ceremony. With the knot tied with the wrong man the floozy's partners start the elimination process, just as Pop arrives to see where his bride to be has gone. In a hilarious run and many attempts to send both Pop and Curley down the elevator shaft, the Stooges fall on Pop and they drag him off back to mom.
Episode Three—“All the World's a Stooge” (1941) or The Fine Art of Qualitative Risk Analysis
During episode three the Stooges continue to refine their risk management skills by applying qualitative risk assessment. In this short, we have a look at “All the World's a Stooge.” A millionaire disguises the Three Stooges as children and brings them home to convince his wife not to adopt. In one of their roles as inept painters, they accidentally become dentists. After blasting plaster from the mouth of their wood-be patient they are on the run and find their temporary millionaire Daddy.
Qualitative analysis involved the process of determining the impact and likelihood of project risk. The process assesses identified project risk and the effect it might have on project objectives. In the case of episode three the objective of the sponsor is to make sure his wife never adopts kids. The qualification of risk is an approach to determine how important it is to address the various risks identified from episode two. Information is critically important in being able to assess the magnitude of each risk on the project. Based upon that assessment, we have a better idea of how serious the risks are on the project objectives.
The notion of qualitative risk assessment considers a proper assessment of both the probability and the consequences of the risk. In the case of this episode, we look at the probability and consequences of the Stooges being able to pass themselves off as kids. With Moe and Curley dressed up in shorts and Larry sporting ringlets and a dress. The P&I look pretty low. However the doting mother is ready to accommodate anyone, even the Stooges to have her own “children.” Using a probability of scale of 0.0 (no probability) and 1.0 (certainty), the Stooges overall rating is about 0.1 to the couple's friends, but .9 for the mother.
With a wild chase through the house the millionaire father, wielding an ax, tries to “eliminate his new children. Now wonder, they have smoked all of his cigars, destroyed most of the house and wreaked havoc with all of the household servants. They even almost roasted their would be mother with cigars under the sofa. The outcome of the episode provides and overall ranking of the risks for the project, a list of the prioritized risks, a listing of additional analysis and management and identified trends. Applying P&I properly the millionaire would have rethought the whole risky notion of discouraging adoption using the Three Stooges.
Episode Four—“Three Little Pirates” (1946) or Refining Risk Through Quantitative Risk Analysis
As we pick of the pace of our story we find the Three Stooges shipwrecked (boat the Garbage Scow) off Devil's Point and are prisoners of the island's governor in the epic “Three Little Pirates.” In order to “walk the plank” to freedom the Stooges must escape from the governor of Dead Man's Island and survive Black Louie's Den of pirates. As they prepare for their qualitative risk analysis to begin the numerical analysis of the risk consequences on project objectives, they are required to take into account a number of things. In a more robust fashion they take a look at the probability of achieving their project objective, springing free from Devil's Island. They are required to quantify their exposure to risk. There options are: (1) their heads chopped off or (2) being burnt at the stake. As Curley puts it “we either gets hot stakes or cold chops.” Larry adds, “I would rather die of old age.” There exposure to risk is pretty high.
Quantitative risk analysis usually follows qualitative analysis, so the boys in this situation need to pay attention to assessing the risk with the most consequences. No doubt they will need to add some contingency reserve to their project. Armed with their risk management plan, identified risks (very identified), a list of prioritized risks and their expert judgment they are ready to perform a Monte Carlo simulation and decision analysis for the project.
With the help of one of their key team members, the Governor's estranged lover, they are able to escape from the palace and head to the Den of Louie the Pirate to buy their way to freedom. Using interviewing techniques to better quantify the project risks, they begin interviewing the lot at the Pirate Den. The look at several probability distributions as they proceed with their interviews. They determine that there are low, most likely and high chances of being able to exit the island. With a knife-throwing contest with Larry standing in as the target, they perform a sensitivity analysis to determine which risks have the most potential impact on the project. As they look at the uncertainty of each of the project elements, they determine that using Larry as the bulls-eye is not the best strategy. Based upon a decision-tree analysis they decide that fighting the pirates is their best option. They proceed using a number of risk mitigation strategies to eliminate the pirates and then flee the island.
Episode Five—“Uncivil War Birds” (1946) or Risk Response Planning
In episode five the Three Stooges find themselves in the Civil War. Moe, Larry and Curley have just proposed and are ready to be married when the War ensues. Plantation life was too easy for the boys as the South enters the war. Bound and determined to wrap it up in a week they head off to enlist. The battle lines are redrawn when Moe and Larry join the Union and Curley enlists with the Confederates. Which sets the stage for developing their risk response plan.
Risk response planning sets the stage for developing a variety of options for the risks identified and quantified. The object here is to enhance opportunities and reduce project risks. Individuals must also be assigned to take responsibility for risks. The Three Stooges have an approach predetermined. It the South shows up then Moe and Larry are Curley's prisoners and if the North shows up then Curley is Moe and Larry's charge.
Development of their risk response strategies ends up taking a number of forms in such a dangerous environment. The Stooges plan an avoidance approach by heading off to the barn when to hid under piles of straw. This is defiantly a good strategy to protect the project objectives and their own hides. They also consider the transference option to shift the risk. This is planned as they boys trade roles from Confederate to Union as the situation warrants. Mitigation is employed as the Union plans to shoot Curley by firing squad. Moe and Larry pull the plugs from the bullets, to mitigate the chances of Curley's untimely demise. This becomes essentially a fallback plan in such a high-risk situation. Unfortunately the firing squad picks up the wrong guns and a workaround is needed. Moe and Larry shoot at everything but Curley, the workaround is successful. With their risk response plan in place, the Stooges are prepared to take on any risk.
Fortunately the War ends and the boys are finally able to be married. There is a little residual risk remaining as a result of the War. Larry still can't ride a horse and the South looses the War. After the marriages the boys celebrate with their wives and end up dumping their drinks down their wives backs, which creates some secondary risks for the boys.
Episode Six—“Violent is the Word for Curley” (1938) or Risk Monitoring and Control
In the last episode in our risk management series we find gas station attendants Larry, Moe and Curly put a little too much super in “super service,” and find themselves on the run. After destroying the car of three new professors headed to Mildew Girls College, they run off with their clothes and are mistaken for the Profs. Proper risk monitoring and control should provide information that assists in determining if a risk event is occurring. The boys have their ears open and determine that the girls need an athletic program; they turn their studies from academic to sports and fun.
The main focus of risk monitoring and control is to respond to risk as they occur, effectively implement the risk strategy when required, continually assess assumptions to ensure they are still valid, pay constant attention to risk triggers and be on the look out for new risks. After escaping from the burning gas station affair, the Stooges reassess their project and determine that they need to take some additional steps. They did this via a project risk audit where they examine identify and document how well their risk response strategies were implemented. They remain constantly vigilant of the technical performance of the project. The boys did this by coming up with good metrics on Mildew College and implementing a new program. The leaders of Mildew College finally came around to the Stooges and girls way of thinking.
The real professors build a basketball that would explode on the boys to get even. Unfortunately for the professors and fortunate for the boys the ball did not go off. What an example of excellent risk management. As a result of a change request from Mildew College leadership the boys were charted to go find the real guys and get them back to the school. Throwing the explodable ball over a hedge the Stooges blow the professors back to the College and all ends happily. This experience is certainly a lessons learned that the Three Stooges will want to add to their risk database.
Proceedings of the Project Management Institute Annual Seminars & Symposium
October 3–10, 2002 • San Antonio, Texas, USA
This standard focuses on the “what” of risk management, including: core principles; fundamentals; and life cycle.