As we continue our series of risk management maturity concepts presented by the principals of MCLMG, we want to illustrate the steps that should be taken to implement a proactive risk environment. May’s article (next in this series) will provide a discussion ensuring risks are documented and analyzed along one of the remaining primary project constraints:
The concept of project constraints has been evolving over the past few years from the initial “iron triangle” of just scope, time, and cost to the more robust realization that projects are subject to an integrated set of primary constraints that include scope, time, and cost as well as quality and risk. The figure that follows (Fig. 1) is an illustration of the relationships of these five primary constraints. Notice that the entire project sits in a circle or boundary of risk since most of a project’s activities are focused on the future progress of a project not its past or present. This future focus is what demands a proactive risk management philosophy as a risk is defined as an “uncertain future event.”
A project manager needs to be keenly aware of the association of the risks to his/her project to one of these specific primary constraints. In other words, each risk will have an impact along one or more of the primary constraints thereby determining the manner in which the risk is defined, assessed, and mitigated. The documentation of each risk in concert with its associated constraint or constraints is the fundamental basis for understanding, managing, and ultimately mitigating its impact to the project.
In order to improve risk mitigation and plan for more effective issue response activities, logging risks and issues into a risk/issues register is simply not enough. The mapping of risk potentials to project constraints immediately benefits the project by allowing the project resources to be applied with a better understanding of their effective utilization on achieving the balance of the constraints needed to produce contracted deliverables. The mapping of risks to the primary constraints of scope, time, cost, and quality support the project’s goal of producing the demanded “fit-for-use” deliverables within the budget and time frames expectations of the business sponsors.
Acceptance by the project management community of the primary constraints model (scope, time, cost, quality, and risk) in place of the less applicable “iron triangle,” or “triple constraints” that was popular during the first two decades of the project management discipline has all but been completed. To progress the risk environment into the needed proactive level of action, a mapping of risks to the primary constraints becomes a necessary activity by improving risk mitigation and the effective planning for more aggressive issue response directives.
Referring to the Primary Constraints Model (Fig. 1), we at MCLMG have shown the need to ensure a balance or equilibrium between the primary constraints is necessary in order to produce the fundamental quality outcome of a project, i.e., the production of “fit-for-use” deliverables. At MCLMG, we call this Deliverable-Centered Project Management (DCPM).
When a project team maps their risk potentials (uncertain future events) along with their risk expected values (REV) to activities being planned, developed, and implemented, a better understanding of the future and its possible impacts on the project’s ability to produce “fit-for-use” deliverables suddenly materializes. Project teams can now focus their attention on those risks with the highest REV and the most severe possible correlation to the primary constraints as the paramount action of implementing proactive risk mitigation for their projects. This mapping will assist in producing the additional risk register / issue log parameters necessary to support the association of risk potentials to the primary constraints.
In subsequent articles for this series, we will be discussing how to actually accomplish risk mapping to the remaining primary constraints of scope, time, cost, and quality. This mapping procedure provides the immediate benefit of risk impact analysis and understanding to support the proactive action of mitigation resulting in the measurable reduction of either a risk’s probability of occurrence (RPO) or its risk cost of impact (RCI). The product of RPO and RCI results in the risk’s aforementioned REV. Risk mapping to primary constraints provides the direct knowledge necessary for risk owners and action owners to successfully mitigate their assigned risks. It is the measurable reduction of risk REVs that determines the business value of a proactive risk management program to its associated project.
In the next four articles in this series, the process and tasks for mapping risks to their associated constraints will be detailed. Join us for these informative and impactful offerings.