Risk Management: Blame Allocation, Biased Opinion, or Objective Reality
Guest Post by Malcolm Peart (first posted on CERM ® RISK INSIGHTS – reposted here with permission)
“I told you so…” is so often cried after something has gone wrong. But was that ‘telling‘ stated clearly and unequivocally before things went wrong or was it merely a passing counterview against a probable likelihood based on an alternative possibility.
When a risk manifests itself and takes a grip on a project it’s amazing how quickly hindsight can kick in. This comes in the form of free advice as to what could have happened to avoid the risk ‘after the fact’. These latter-day soothsayers were, for some reason or other, unprepared to prove their prophetic ability before the fact preferring, it would seem, to go with the flow as an uninvolved observer but officious bystander when all facts are revealed.
Hindsight, coined as 20:20 vision is merely retrospective reporting and analysis and will not change the past. Unfortunately, individuals who ‘told us so‘ rarely offer solutions to the problem they predicted. Oftentimes these soothsayers believe that they can act with impunity as they offer damning, but late, unneeded and unwanted criticism, rather than timely, supportive and constructive advice.
Risks Foreseeable (Knowns – Known & Unknown)
If the realised risk was on the risk register then it was either ignored completely or it snuck up on the poor unsuspecting victims and pounced on them. The Risk Management team did their job during project planning but the execution team will, inevitably, be blamed for not dealing with the known risk, despite a perception of low possibility.
The risk register can be so easily populated based upon pessimism and colour-coded on perception. Perception is so often biased towards optimism, after all project proponents don’t start off with failure in mind. They inevitably believe in the mitigation measures on the register and the perceived possibility of a risk occurring becomes less; nothing can go wrong, warning signs are ignored, and Murphy can barge in.
If a project team does not see a pattern of problems emerging or ignores adverse trend in terms of production, costs incurred, quality defects, or contractual complaints this may be seen as blissful ignorance. Such unawareness is not only ignorance but, if the ‘knowns’ were made known to the project management team, then unawareness will constitute negligence.
These ‘knowns’ may well be included in a risk register, but how often is a risk register so voluminous that it will not be read, nor is it explained to the team. An overpopulated and exhaustive register may appease the pessimist and risk averse manager but if real risks are not considered in context such voluminosity may do more harm than good.
Risks Unforeseen (Unknowns – Known)
If the risk that is realised isn’t on the register was there a problem with the planning or is it more likely a problem is with the ‘risk management’ during execution. “Risk register reviews” and routinely listing the ‘top ten risks’ on a progress dashboard may provide assurance that risk is being ‘managed’. However, if this is considered adequate why do so many projects fail or, more likely, merely overrun in terms of cost or time or both.
Risk Management is not necessarily about foreseeing the future and documenting every conceivable as opposed to probable risk but being aware of the environment in which a project is being executed. Opportunities and risks present themselves and they must be dealt with actively and proactively. Identifying and subsequent analysis of an emergent risk during execution is part of accepted risk management practice but how often is time, or money or personnel, authorised on evaluation, planning the treatment and subsequent monitoring?
If ‘standard’ risk management practice is adopted then will an unknown risk that emerges be managed appropriately? If such a ‘risk’ becomes a reality it cannot be merely communicated and monitored. A passive ‘business as usual’ approach is far from real risk management”. Reality happens and must be considered objectively
The ‘designated risk manager’ in any team cannot merely review and communicate risk but needs to advocate action. Covering one’s ass by merely reporting “I told you so” in a belief that this will provide absolution will never help a project in trouble or facing it. But just as unbridled optimism can be the flavour of the day in the wild enthusiasm of a project starting up, abject pessimism may well result when the going gets tough and there is a need to face reality.
Risks Unimagined (Unknown Unknowns)
If risks emerge that are outside the project team’s or the organisation’s experience then these cannot be readily explained and are more difficult to deal with. Rather than deal with reality objectively the blame game is played.
A scapegoat may well be sought and blame will be allocated; after all somebody somewhere must surely be responsible. Similarly, somebody, somewhere may well discover that the risk that emerged out of the blue was actually foreseeable. However, unless that somebody also discovers a way of dealing with the risk, its mere identification is of little use unless a means of mitigating it is found or formulated.
While project proponents are optimistic there needs to be the realisation that the phrase of ‘nothing can go wrong’ is actually wrong. The real project truth is according to Murphy and that ‘if it can wrong it will‘; a harsh and unforgiving lesson in reality.
These unimaginable risks, above all else, require action rather than just putting them down to experience, documenting a costly lesson learned, and adding to a more populated risk register for a future project.
Ideally all risks should be identified and mitigated in the first place but if they emerge during execution then action must be taken. Such action must be positive and objective rather than looking for scapegoats, shooting messengers and sending a sacrificial lamb(s) to slaughter.
Being wise after the fact, as with hindsight, is of no use if the ship has sunk or the horse has bolted. The wild optimists who think that “nothing can go wrong” can be so very, very wrong when it comes to risk and a degree of pessimism may temper such wildness.
t’s an unfortunate aspect of risk that it’s so easy to be wise after the fact. It’s also human nature to give advice, wanted or unwanted and when somebody says “I hate to say “I told you so” but...” they have done so in any case…
UK Chartered Engineer & Chartered Geologist with over thirty-five years’ international experience in multicultural environments on large multidisciplinary infrastructure projects including rail, metro, hydro, airports, tunnels, roads and bridges. Skills include project management, contract administration & procurement, and design & construction management skills as Client, Consultant, and Contractor.