Professional Documents
Culture Documents
Defining Risk
An uncertain event or set of circumstances that, should it or they occur, will have an effect on the achievement of the (business or) projects objectives APM PRAM Guide 1997 Project risk is an uncertain event or condition that, if it occurs, has a positive or negative effect on a project objective. A risk has a cause, and if it occurs, an impact Revised PMBOK 2000.
a systematic approach to dealing with risk. A risk management system should: establish an appropriate context; set goals and objectives; identify and analyse risks; influence risk decision making; and monitor and review risk responses. (p.339) MoR: The term management of risk incorporates all the activities required to identify and control the exposure to risk which may have an impact on the achievement of an organisations business objectives. The Project Management Institute: Risk Management is the systematic process of identifying, analysing and responding to project risk. It includes maximising the probability and consequences of positive events and minimizing the probability and consequences of positive events and minimising the probability and consequences of adverse events to project objectives. APM PRAM Guide 1997: The process whereby responses to the risks are formulated, justified, planned, initiated, progressed, monitored, measured for success, reviewed, adjusted and (hopefully) closed
Considerations
Likelihood Probability Impact Effect on youseverity, consequence etc Proximity when? Perception Testosterone?
Probability
Death Disease kills 15 times more people than accidents Of the 500,000 people that die every year 3000 people are killed on our roads (500 of these are alcohol related) 0.6% of all deaths, 0.01% of the population. 4000 accidental deaths around the home - 0.8% of the all deaths 0.07% of the population 18 knife fatalities this year (27 in total last year)
Breast Cancer
The commonly quoted figure of 1 in 9 extends over a womans lifetime. Magnitude of this risk will not manifest until a woman is over 80 years. Risk up to age 25 Risk up to age 30 Risk up to age 40 Risk up to age 50 Risk up to age 60 Risk up to age 70 Risk up to age 80 Risk up to age 85 1 in 15000 1 in 1900 1 in 200 1 in 50 1 in 23 1 in 15 1 in 11 1 in 10
Travelling safely
Flying is much safer than driving a car. You'd have to fly every day for the next 26,000 years to die in a crash. (during that time you would have died 20 times driving to the airport.)
Travel Perception
Air industry will choose per Km basis as most fatalities occur on landing and take off Land based transport will select fatalities per journey or hours of travel risks are uniformly spread
Repossessions
12,285,000 mortgages in UK 25840 2007 - 0.21% of all mortgages 45000 2008 0.37% of all mortgages % increase = 174% HEADLINE GRABBING Actual increase = 0.16 of 1%
Helmets are shown to have no statistically significant effect on the probability of a fatality given that a motorcycle accident has occurred. This means that based on standard statistical tests we cannot reject the claim that helmets do not affect the probability that a rider will survive a motorcycle accident. It is shown that past a critical impact velocity to the helmet (approximately 13 mph), helmet use has a statistically significant effect which increases the severity of neck injuries. If a major concern of policy makers is the prevention of fatalities, helmet legislation may not be effective in achieving that objective.
Construct
Feasibility
Design
4
3
Established
2 1
Formalised Undeveloped
High Inflation Political interference on the Olympics The Global Credit Crunch Policy not to employ Consultants for Government work Change in Government Spending Policy Graduate Recruitment Shortage
Environmental
Technological
Legal
LIKELIHOOD
Description Very High High Medium Low Very Low
Guide Probability 90 75 50 25
RAMP Value
RAMP Value 16 12 8 4
Guide Cost Guide Time % % of Project of Prog. 2 5
IMPACT
Description
Very High
High
Critical impact on the achievement of objectives and overall performance. Huge impact on costs and/or reputation. Very difficult and possibly long-term to recover. Major impact on costs, objectives. Serious impact on output and/or quality and reputation. Medium to long-term effect and expensive to recover. Reduces viability significant waste of time and resources and impact on operational efficiency, output, and quality. Medium term effect, which may be expensive to recover. Minor loss, delay, inconvenience or interruption. Short to medium term effect. Minimal loss, delay, inconvenience or interruption. Can be easily and quickly remedied.
1000
500
1.5
Medium
50
1.5
VH
L VL 5 1 0.5 0.25 0.75 H
16 12 8 4 2
VL
80 60 40 20 10
L
Likelihood
0.25
M L VL
Analysis - Proximity
H
LIKELIHOOD
DISTANT PROXIMITY
IMPACT
IMMINENT
Mitigation
Value for money Appropriate Doable Success should be obvious Focus on: Reducing likelihood Reducing the impact Need not be what has been done before Ignore the flannel ask will it really make a difference to this risk?