ON THE EDGE

Where Did the Numbers Go?

by Carl Pritchard, Pritchard Management Associates


There's a major push afoot within risk management circles to drive numbers out of risk management. Qualification is being touted as the newfound "manna" to feed the hungry tribes seeking risk information. Even the Project Management Institute is bending in that direction. The exposure draft to the latest (Y2K) Guide to the Project Management Body of Knowledge layers in a whole new practice of risk qualification as "risk assessment."

But why? When did numbers take on such a hard taint that they are no longer valued, or are perceived as unwieldy or unworthy of our consideration? Just as the computer tools are gaining sufficient speed (and expertise) to actually manage some of the data that we can churn into them, as a practice, project managers are backing away from the numerical values. The reason is rooted in something far more significant than levels of effort and statistical accuracy. As a general rule, I believe project managers are becoming more honest about the profession.

Numbers are the meat and potatoes of much of project management practice. The project management software churns out a sea of numbers, without questioning their sources, their roots and accuracy. One number may come from a veteran with 30 years' experience. Another number comes from a database of historic project information. The third comes from the optimistic rookie without a scar on his/her back. Yet they are all (in most environments) treated alike. The numbers become the gospel. They become the drivers of the project-their authority unquestioned.

For years, risk practice has enabled this fiction, layering numbers on numbers and multiplying values against values. Finally, the risk community is stepping forward in honesty, saying qualification counts. Qualification, rather than quantification, acknowledges that we cannot see the future, but can make intelligent guesses about its potential outcomes. Qualification acknowledges differences of opinion on how dangerous or how potentially expensive a particular risk may be. Qualification takes all of the annoyances of daily life-politics, personalities, frustrations, past experience-and weaves them into risk consideration through consistent practice.

Those last two words are critical. Consistent practice. Organizations seeking the opportunity to implement risk practice consistently will do their best when they clarify the ranges of risk impact and risk probability in consistent terms. When they clarify what constitutes a high impact risk and what constitutes their "threshold of pain" as an organization, they have made major strides forward. Once that is accomplished, the stage for qualification is set. And the latitude that project managers have taken by ascribing hard values to fuzzy issues begins to wash away.

It's a bandwagon that more and more organizations are joining. The first steps are simple. Establish the terms that say, "This is a high probability." Different people have different perceptions of high probabilities. Clarify what it means. Does it mean "distinct possibility" or "virtual certainty?" Ascribe terms and values to ensure that every team member and every project manager consistently applies them. Over time, they become part of the culture. Over time, risk management becomes less of a mystical practice and more integrated.

Should qualification ultimately replace quantification? I don't believe so. When the numbers are available, they should be deployed. But in many instances, the numbers are forced. They are works of fiction. And the time for fiction in project risk management is nearing an end.








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