Assumption->Risk->Assumption Lifecycle

Rich at Scope Crêpe has a nice post here on assumptions and risk.  I like the way he ties them together with the concept of an “assumption lifecycle.”  I also like the butterfly metaphor (can’t vouch for the accuracy of his biology here).  From his article:

Assumptions are the larval state of a risk: As you begin a project, you make some assumptions. These are typically conscious assumptions, such as: “the bedrock in the area we are digging is sufficiently deep enough for us not to be concerned about needing to blast”. Now you start to dig, the work crew informs you that they have encountered rock. This assumption has just matured. You have yourself a risk.

Spot on…we teach PMs to do two things to ameliorate this tendency to assume:

  1. Be explicit about your assumptions.
  2. Each assumption should have a corresponding risk identified.

In PMI terminology, this particular risk is a threat– the negative variety of risk. It could just as well have been the other way around – you might’ve assumed a certain amount of blasting and then been lucky enough to have this particular assumption blossom into an opportunity. Either way, you are seeing the point, I think, that assumptions do grow up.

I also like that Rich emphasizes that risks aren’t always bad (or at least can’t have an upside).  We also like to emphasize that the purpose of the governance and compliance framework we put in place is to allow us to take on more risk so we can reap greater rewards

Risks can regress back to assumptions with human intervention: This actually brings up one of PMI’s important themes. Risks are not something to be identified and forgotten about. They need to be monitored as you execute the project. New risks may arise (threats or opportunities), and some risks you’d identified may not really be significant to think about, so you can relegate them back to assumptions. This is why I assert that it takes human intervention to devolve the risk to an assumption. It should be done consciously and with the idea that it might mature suddenly on you at any time.

Too many times risk management means risk identification at project start, prioritization of risks (via quantitative or qualitative analysis, and some sort of response plan.  Then that all goes into a drawer or network folder and are forgotten.  To Rich’s point, risks must be continually managed throughout the projects — PMs can’t go directly into issue management mode.

Assumptions have the capabilty to camouflage: There are, unfortunately, many assumptions that you make unknowingly. For example, you may be doing business internationally and not consider the exchange rate between two countries, perhaps because it’d been stable for decades. In this case, the assumption successfully hid from you.  Obviously this is not a good situation because without even documenting this assumption, you didn’t even have a basis for developing a risk response plan, since it wasn’t even identified as a potential risk.

In our experience, having a diverse project team mitigates the risk that you run into “unknown unknowns” — an uncertainty that is unanticipated and, hence, unaccounted for — especially ones that could have been know with some due diligence. As Rich notes:

This is why I coach my PMs and my students to get as broad a view and as deep a view as possible when brainstorming risk identification. Ask those who have been in the trenches. Go WAY outside of the office to find these hidden risks. Perspective is absolutely a lifesaver here….

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2 Responses

  1. Thanks for finidng and then referencing my post. There have been several since then on risk management as well, I suggest that your readers head on over to have a look at those, too.

    Regards,

    Rich

  2. […] Comments How does one practic… on How to behave the way we want…Rich Maltzman, PMP on Assumption->Risk->Assump…Paul Ritchie on How to behave the way we want…Scott Middleton on How to behave the way we […]

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