CERM® Risk Insights

Guest Post by Annette Davison Ph.D (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

According to the definition in ISO 31000, risk is the impact of uncertainty on [achieving] your objectives. Of course, this impact can be both negative or positive. ISO 31000 states the following:

“Clause 6.4.2 Risk identification: The organisation should identify risks, whether or not their sources are under its control.

Clause 6.4.3 Risk analysis: The effectiveness of existing controls.”

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Guest Post by John Ayers (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

There are two basic types of contracts applied to development projects. They are Firm Fixed Price (FFP) and Cost-Plus (CP). Each type has a number of different variations shown in Table 1. FFP contracts are for projects with mature technology, less uncertainty, and more predictability. CP contracts are for projects with new technology, a lot of uncertainty, and less predicability. There are other types of contracts but are out of scope for this paper.

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Guest Post by Malcolm Peart (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

People!  People in positions of authority wish for popularity, they may demand respect in one way or another but, above all, being trusted is perhaps the most desirable.  Trust, they say, needs to be won, respect is awaited expectantly but not necessarily given enjoyably, and popularity is fleeting.  In the absence of trust and respect, and despite any feelings of friendship or congeniality, toxic environments can prevail even though their obnoxiousness is well known as is the souring effect on human relationships.

Everything, at some point, involves people and relationships of some sort will develop in one way or another.  Psychologically speaking, relationships are based on individuals and their personal needs or desires for socialising and maintaining both a physical and emotional balance.  The same is also true of groups of people.

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Guest Post by Patrick Ow (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

If your organisation is suffering from performance issues despite what you consider well-executed strategies, plans, and initiatives, then you have a range of roadblocks holding you back.

Typically, when organisations are losing market share or not making achieving their revenue targets, the first thing they do is to change their goals, strategy, mission, structure, vision, values etc, and even their plans.

Looking externally seems to be the easiest when organisations are suffering a range of performance challenges that they want to improve.

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Guest Post by Dianna Deeney (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

New product development engineers are managing risks, daily, with each design decision: unknown risk in creating something new, risk introduced through a failure, human factors risk, and other risks related to products and services. Their design decisions affect downstream activities (from production through disposal) and the bottom-line success of the product in the market. How can engineers manage these risks through the design process?

Proactively managing risks can be an iterative part of product design engineering. Risks can be managed at the early concept phases of development when changes to the design are easier to make. Finding and addressing risks also helps the team to avoid surprises late in development and after the product has been released to the market. The results are not only managing risks but also managing the design process for a more successful product.

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Guest Post by Malcolm Peart (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Projects are about businesses and business is about money.  Very few firms are not-for-profit and profit margins are fundamental to ensuring a company’s survival in the dog-eat-dog world of the markets they operate in.  Profit declaration is an essential part any company’s annual report and a quick, but not necessarily accurate indicator of its financial health.

According to the microeconomic ‘Theory of the Firm’ companies exist to maximize net profits and all decisions must bear this in mind. But profit margins are based upon forecasts and assumptions until a final account is determined.  It’s only then that the grim reality of undeniable and irreversible losses is seen or the comfort any balance hasn’t slipped into the red, or the euphoria that predetermined margins have been maintained or even exceeded!

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Guest Post by John Ayers (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Two schedule tools are widely used for the Integrated Master Schedule (IMS )around the world to manage projects. The first one is Microsoft Project (MS Project). The second one is Primavera P6.  They are both very good. Primavera P6 is an Oracle product originally designed for the construction industry. MS Project is simpler and easier to learn based on my experience. It also costs less than Primavera P6. DOD uses MS Project and typically requires it for use on government contracts. Other industries use one or the other depending on the size and complexity of the project.

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Guest Post by Bill Pomfret (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Compliance management is getting more challenging. Not only are legislators and governments around the world imposing more regulations, but the expectations placed on compliance leadership to management expanding scope of compliance oversight is growing every day. The periphery of compliance–including ethics, diversity, ESG, and risk management–ask to sever more of compliance leaders who are seeking to best manage, scale, and address compliance demand efficiently and effectively.

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Guest Post by Patrick Ow (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

Risk professionals can learn from Russia’s unprovoked war on Ukraine.

The ripple effect of the war on every individual can be felt across the globe. One such effect is the increase in fuel and food prices. This war is a stark reminder that we are living in an interconnected world. And the inter-connectedness of our risks within and external to our organisation must be considered as we identify and manage our risks. The complexity of our risk management practices should not be under-estimated.

Here are some risk management lessons we can learn. [Read more…]

Guest Post by Bill Pomfret (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

When the electricity grid fails, there is a risk of cascading impacts from what might seem to be a relatively minor event.

Having just watched a Electric Power video on this very topic, I feel obligated to inform the masses, what would happen if the power grid shut down?

If the power grid goes down, water and natural gas will also likely fail at some point, so planning is critical. Without a plan in place, most of us would be in bad shape with an extended grid outage.

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Guest Post by James Kline (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

The Government Accounting Standards Board (GASB) on June 20, 2022, issued an exposure draft on the disclosure of certain risks. This piece examines the requirements and problems.

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Guest Post by Bill Pomfret (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

The Focus of driver safety is on preventing accidents and implementing the necessary protocols to control risk across commercial fleets, but crashes do happen, so, the question I ask is are fleets doing enough to help drivers when they are involved in a collision?

The size of the problem

Globally an estimated that 1.3 million people die every year due to a road traffic collision, in addition there are between 20-50 million more suffering non-fatal injuries. These often result in life-changing injuries, which have far-reaching consequences for both family and friends. Research has shown that up to 40% of people will be trapped in their vehicles following a collision. [Read more…]

Guest Post by Malcolm Peart (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

This is a story about project reporting, and its importance to project management.  No matter how many or how few reports there are, it’s the report that provides the information that managers need to make decisions.  It’s also not about the glut or the dearth though, it’s about the quality of the content and timing of delivery that can make all the difference between right or wrong decisions, and a project’s overall outcome.

So, if you are sitting comfortably then I’ll begin.

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Guest Post by John Ayers (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

A Hybrid Methodology combining the speed and flexibility of Agile and the structure of Waterfall is feasible and practical. I base my opinion on the research I have done. I recently presented a Webinar to Project Management Institute (PMI) members on how to merge Agile and Waterfall to achieve a Hybrid methodology. The focus of this paper is to address the greatest risk to a company in implementing the new methodology i.e., acceptance of it. I addressed how to accomplish the merger to achieve a Hybrid method in a paper I wrote and posted on LinkedIn in May.

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Guest Post by Bill Pomfret (first posted on CERM ® RISK INSIGHTS – reposted here with permission)

20 years ago, I wrote extensively, and held a rally on Parliament hill regarding the two-faced Canadian Government and Asbestos. At that time, I had just visited India, where I witnessed Canadian Asbestos being unloaded from Vessels, with workers wearing only flip flops and loin cloths using large hooks to grab the bales.

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