The book provides new and additional knowledge to project management practitioners (beginners to experts), risk management specialists, project controls people, estimators, cost managers, planners and schedulers, students of undergraduate courses in Risk Management, and the next man on the block.
The sectional contents offer practical and common sense approach to identifying/managing risks. It is a must have for company managers, directors, supervisors, aspiring industry professionals, and even those students fresh from high school.
The material is especially design to start with the foundational principles of risk gradually bringing the reader to deeper topics using a conversational style with simple terminologies.
What is risk-based management (RBM) to you? Do you have a good understanding of risk and the concept surrounding it? How is risk-based management applied? Are you aware that you are into risk-based management with every breath you take? Do you know that risk can be both an opportunity and a threat? Do you want to know more?
RBM is serious approach and a philosophy that considers risks while managing any endeavor (project or task) throughout its lifecycle.
If you fully understand risk, you will surely understand risk-based management. Think whatever endeavor you’re into. Did you select the best option? If you are not sure how to go about your pet project, then risk-based management will help you.
Management by objectives is coupled with a healthy focus on risk management by increasing the probability of success, enhancing opportunities, and/or preventing/mitigating threats.
In order to appreciate this management approach requires in-depth understanding of risk itself. This is what the book “Risk-based Management in the World of Threats and Opportunities: A Project Controls Perspective” is about.
We attribute the high failure rate of projects to a combination of factors, namely a lack of support from business leadership, incompetent project managers, and a firms’ unwillingness to treat a project as they would a start-up business.
If you think this is all there is it to it, then you are in for a surprise. There are more where they came from. I have seen many of these things while in different roles after decades long of exposure across industries.
Of course, it is very clear that a project cancelled before it is fully completed is a failure. The degree of failure depends on how much stakeholder money and other resources have already been used and wasted.
We must also consider the cascade effects of such failure to any company’s bottom line. Crossing the bottom line can result to layoffs, across the board budget cuts, low dividend returns for stockholders, loss of reputation, and decreased stock price to name a few.
Risk-based management describes the available choices and options considered against their associated risks. Actions become possible when we are sure that we adequately comprehend the risks before us.
Looking at how other types of management work makes the risk-based concept ideal, since it is a simple perspective that can easily integrate other concepts.
Decisions evolve from a situation where one has to make a choice. The option can be to do or not to do something. It can also be to select one option from a range of options.
The most important objectives drive final decision. It is constrained by any, or combination of social, technical, business, safety, and environmental factors. Successful decision-making requires an understanding of each of these factors and objectives (RiskTec, 2013).
There are professionals who have difficulty accepting the term “risk-based.” It simply means that risk should be the main contemplation, while keeping an eye to achieving business objectives. It is therefore a foundational concern in the pursuit of a goal.
Pursuing a goal naturally results in risk management. This is how we end up with risk management. Under this paradigm, the concern revolves around the decisions we need to make, i.e. whether to avoid or mitigate in the case of a threat, and whether to enhance or exploit in the case of an opportunity.
Risk is not only a factor or featured element of management; it is the central concept at play. It should be the focus of management, second only (if not equal) to the main objectives.
An excellent risk manager will see clearly that the objectives and end deliverables are part of the risk. They are the grand consequences of the positive risks (opportunities) identified, and the very reason why the project was initiated. Risk-based management is as important as the objectives.
Failing to mitigate the risk means failure to meet the objectives. When that happens, the risk is on equal footing and of the same importance as the objectives.
I trust that you will find this book helpful as you proceed addressing the challenges of your own risk universe.
The book “Risk-based Management in the World of Threats and Opportunities: A project Controls Perspective” was officially published by Amazon in Kindle Edition (e-book) and paperback in 2015.
The paperback edition is also now available in Indigo/Chapters Book Store.
Highlighted summary contents of the book:
1) The concept of risk and the practicality of risk-based management
2) Detailed instruction on risk quantification using the OPRA tool
3) The risk management processes and knowledge areas
4) How to prepare a good quality schedule and sound execution plan
5) Tips on schedule risk modeling
6) Planning and scheduling heuristics
7) Here is the list of chapters:
Chapter 1 -Risk Concepts and Philosophies
Chapter 2-Risk-based Management
Chapter 3-Risk-based Planning and Scheduling
Chapter 4-How to Prepare for Schedule Quantitative Risk Analysis
Chapter 5-Schedule Quantitative Risk Analysis
Chapter 6-Importing Schedule to OPRA
Chapter 7-RBM and Natural Disasters
Chapter 8-Managing Cultural Diversity
Chapter 9-Project Integration
Chapter 10-Key Risk Indicator (KRI)
Chapter 11-P50 Risk-based Baseline Schedule
Chapter 12-Mega-projects Schedule Integration
Chapter 13-Risk Assessments and Treatments
Chapter 14-Root Cause Analysis (RCA)
Chapter 15-Road to Operational Excellence
Chapter 16-Keys to Organizational Success
Chapter 17-Risk-based Management Wisdom
Information about the author
RUFRAN C. FRAGO, P.Eng, PMP®, CCP, PMI-RMP®