We are here to learn some tools to help us manage risk in engineering projects and operations….we will explicitly spend some time on both during the rest of the course.

Let’s start with a review of the “Big Three” keys to risk management:

-What can go wrong? (This is where we focus on identifying risks)

-How likely is the failure to happen? (risk assessment and probability….both qualitative and quantitative)

-What is the consequence of the failure? (more risk assessment)

As leaders/managers we seek to understand these things as we plan or projects/operations. Once we understand the risks that are most impactful to the likelihood of meeting our objectives (IMPORTANT NOTE….you can’t do any of this without understanding and defining a set of objectives!), we then seek to minimize the probability and our reduce the consequence (impact is another good word) of the “bad” event.

RISK MANAGEMENT IS FUNDAMENTALLY A PLANNING TOOL!

There are five process groups to a project:

-Initiating

-Planning

-Executing

-Closing

-Monitoring and Controlling

This is a simple yet important point, our risk management activities are heavily focused in project planning processes. All but “Monitor & Control Risks” fall into the project planning lane. Hopefully it is obvious that Monitor and Control Risks falls into the project Monitoring and Controlling process lane.

While I don’t mind which of the several different RM processes you use, I will stick with the Project Management Institute’s PM Body of Knowledge for these notes and lectures (I have provided some of the other approaches in slide decks in the Course Documents tab)

So what are our processes:

-Plan RM

-Identify Risks

-Perform Qualitative Analysis

-Perform Quantitative Analysis

-Plan Risk Response

-Monitor and Control Risks

So going back to the big picture….why do projects fail (we will cover why operations fail much more specifically later in in the course). In our text, we identify three reason, which each have many sublayers to them:

1. The project is impossible (think technology)

2. Project is overconstrained (not enough time or resources)

3. Incompetent management

As a manager, you need to be able to deal with all three of these in the planning process…even if it means canceling or rethinking the requirements of a project.

Next week we will cover Risk Planning in detail, but for this week, your discussion assignment is as follows:

**From your personal history or another source (internet, newspaper, book etc) identify a project that failed and talk very briefly about why? I am looking for 250 words or less. Think of it as if you were talking through it with a CEO in an elevator in order to get his or her attention to this type of failure.