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turning vision into reality through projects®STRATECH / TheProjectOffice

www.theprojectoffice.net© Pedro C Ribeiro 2007

Predictable Project SurprisesBridging Risk Perception Gaps

Pedro C. Ribeiro, MBA, PMPPresident, Stratech/TheProjectOffice

Presented by



Pedro C Ribeiro, MBA, PMP

Pedro C Ribeiro is President of Stratech/TheProjectOffice which specializes in project management and risk management consulting and training. A former Director of Ernst & Young Consulting, Unisys and EDS he has over 25 years of executive and consulting experience with global organizations. He holds an M.B.A. from The Wharton School, University of Pennsylvania, having participated in the Project Management Program of the Massachusetts Institute ofTechnology (M.I.T.) and in the Managing Business Transformation Program of the Harvard Business School. He is a certified Project Management Professional PMP, a Director for Central & South America PMI Risk Management SIG, a member of ISO 31000 International Risk Management Working Group, and a Board Director of PMI Educational Foundation. He has conducted presentations, executive workshops and seminars in Latin America, United States and Europe and has contributed to publications including PMI Today, Chief Project Officer and PM World Today. Pedro Ribeiro lives in Sao Paulo, Brazil.

He can be reached at [email protected]



• In many projects that fail there are early warning signs that the project will run into trouble.

• However,many times, these signs are ignored and organizations end up not recognizing the early signs of failure until it is too late.

• This presentation will explore the challenges of Predictable Project Surprises, Risk Perception Gaps, research, tools and ideas on how to identify early warning signs of project trouble.

Presentation Summary



Agenda

• Project Failure: The Good and the Bad News

• Predictable Project Surprises, Project Catastrophes and Risk Perception Gaps

• A real case: The Unfold of a Project Catastrophe

• Applying Project Catastrophe Mapping (PCM)

• Results of PCM Workshops

• Conclusions



Projects Fail For Many Reasons...

– Expectations were not realistic, not managed, or poorly communicated.

– Requirements were unclear, contradictory, ambiguous, or there was a lack of agreement and priority

– Lack of resources, resource conflicts, or poor resource planning.

– Risks were poorly identified or not managed.

– .....Source:Center for Business Practices Troubled Projects Research: Project Failure or Project Recovery 2006



...however,independently of why a project failed...

A Key Question:Was it a complete

surprise for all project team members ?...



Good News!...



...rarely a surprise.

• Some people in the organization knew it.

• The grapevine knew it...may be well in advance.

• Some project team members knew it and tried to warn the organization.

Source:The Wisdom of Grapevinesby Pedro C Ribeiro, MBA, PMP

The Dead Fish of Failure…It sits on the table of far too many projects…Everybody smells it right away.- Tim Lister



The Silence Fails Study

• 90% of employees know far in advance when projects are doomed.

• 82% of employees say that there are significant organization-wide initiatives underway in their workplace that will likely to fail.

• 78% of employees say that they are personnalyworking on a “doomed”project right now.

Source: The Silence Fails Study Vital Smarts and The Concours Group - 2006



• “71 % of surveyed employees say that they try to speak up about their concerns to key decision makers but do not feel they are heard

• 19% don’t event attempted to speak”• 85% of all project failures can be

attributed to “organizational silence”.

The bad news is that some of these potential early warnings go sometimes unnoticed...

Source: The Silence Fails Study Vital Smarts and The Concours Group - 2006



....at all levels...

“There is a large disconnect between senior management and project sponsors on one hand ,and project managers and their teammates on the other.They are not communicating”.

Source:PCI Global Survey 2004Does your organization support, ignore or obstruct project management?



...leading to Predictable Surprises

“Predictable surprises are events that catch leaders off guard even though they had all the information necessary to anticipate them”.“Predictable surprises occur regularly in organizations public and private” Source:

M.Bazerman and M.WatkinsPredictable SurprisesHBS Press 2004



Agenda






• Conclusions



Predictable Project Surprise – PPS

A sudden project status change, or "discontinuity”in project expected or actual results, that take an organization by surprise, when project team members, already expected it, and tried to warn the organization.

Source:Project Catastrophes and Risk Percetion GapsHow to avoid Predictable Project Surprisesby Pedro C Ribeiro , MBA, PMP



Predictable Project Surprises behave similarly to Catastrophes

• Catastrophe Theory - Branch of topology developed by René Thom to qualitatively describe events characterized by major abrupt changes. Catastrophes are discontinuous transitions that occurs when a system suddenly jumps, or is perceived to jump, from one state to another, such as the collapse of a bridge, a stock market crash or change in perceptions.

• Project Catastrophe: A discontinuous transition that occurs when a project status suddenly jumps, or is perceived to jump, from one status to another. The project suddenly collapses leaving us wondering what went wrong.




Project Catastrophes may unfold due to unadressed differences in Risk Perceptions

• Perceived Project Risk Level– An individual’s subjective assessment of a

project’s risk level (likelihood and consequence), before risk responses.

• Perceived Risk Response Capability– An individual’s subjective assessment of

an organization’s competence ( technology, processes and people) to effectively formulate, plan and execute risk responses to perceived project risks.

• Expected Project Results– An individual’s expectations with regard to

the feasibility of achieving project objectives as a result of Perceived Risk Levels and Risk Response Capability.




Risk Perceptions depend on many factors

HIG

H

Perc

eive

d R

isk

Lev

el

HIGHLO

WLOW

Perceived Risk Response Capability

Mission Impossible...

..A Walk in the Park


Risk Perception Map (RPM)

..OR



Agenda






• Conclusions



How Project Catastrophes unfoldThe International Telecom Project…

• A global services corporation entering a major global bid in South America.

• The company did not match all bid requirements, but..

• The international bid team did an excellent job in preparing a proposal, and winning the bid …

…the project that would save the Quarter and the Fiscal Year…

A Pattern of Project Catastrophe

ITP



Management Expectations



Client Expectations



Project Team Expectations



Project Results

- I knew it from day one- Remember, I warned you...- Nobody listened...

- How could this happen?- You did not say that...- If I knew that I would...



Agenda






• Conclusions



Project Catastrophe Mapping (PCM)A visual brainstorming tool designed to help identifying and discussing project Risk Perception Gaps and Catastrophes.

HIG

H

Perc

eive

d R

isk

Lev

el

HIGH

LOW

LOW



Project Catastrophe Map (PCM)




Mapping Risk Perceptions

HIG

H

Perc

eive

d R

isk

Lev

el

HIGH

LOW

LOW


Piece of

Cake

MissionImpossible

T

M

C

ITP Early Warnings during Concept/Planning

Difference in Perceived Residual Risks

Residual Risk: A risk that remains after risk responses have been implemented PMBOK 3rd Edition Risk Perception Map (RPM)



A Risk Management Divide

Risk Analysis

PlannedRisk Responses

Risk Identification

Risk Analysis

UnnoficialOfficialRisk Identification

Official Unnoficial

Official UnnofficialAssessment of

Cababilities

PERCEIVED RISK LEVEL

PERCEIVED RISK RESPONSE CAPABILITIES

Official Processes and Tools

Source:The Wisdom of Grapevinesby Pedro C Ribeiro, MBA, PMP



Barriers to detectingRisk Perception Gaps

• Risk is a Four Letter Word• Organization Culture.• Pressure for Results• Attitutes towards Risk• Methodology=Filling forms• Technical Jargon• Best Software, Hardware

...and little Peopleware• Unclear Risk Decision Rights

HELP!




HIG

H

Perc

eive

d R

isk

Lev

el

HIGH

LOW

LOW


Piece of

Cake

Big Challenge

MissionImpossible

T

M

C

Mapping Risk PerceptionsITP Early Warnings during Execution




HIG

H

Perc

eive

d R

isk

Lev

el

HIGH

LOW

LOW


Piece of

Cake

Big Challenge

MissionImpossible

T

C M

Mapping Risk PerceptionsITP End game




Mapping Project CatastrophesUnderstanding Scenarios and Consequences

A

B

C


Perc

eived

Risk

Lev

el

Expected ProjectResults

A

B

C


Perc

eived

Risk

Lev

el

Expected ProjectResults




Agenda


• Predictable Project Surprises, Projec Catastrophes and Risk Perception Gaps




• Conclusions



H

IGH

Perc

eive

d R

isk

Lev

el

HIGH

LOW

LOW


Workshop Results ORG1 NPB: HEM

45 % 60 %

10 %




H

IGH

Perc

eive

d R

isk

Lev

el

HIGH

LOW

LOW


Workshop ResultsORG2 PB: ECF

68% 16 %

70 %




Agenda






• Conclusions



PMNetwork July 2007

Risk Management and Communications

Opportunity



Learn to Recognize Risk Perception Gaps– Early warnings always precede project surprises and project

surprises are often the result of ignoring available signs of risk.Listen to your Project Team– Project Catastrophes starts forming when the real project risk

identification and analysis start happening only in the cafeteria, after hours or during informal conversations and not during your official risk reviews.

Prepare your organization to detect looming Project Catastrophes– Unaddressed Risk Perception Gaps breed Project Catastrophes

and are detrimental to project teamwork and commitment.PCM can complement Risk Identification and Lessons Learned

- Recognizing early formation Project Catastrophes is an opportunity for project management continuous improvement....

Summary



Pedro C. Ribeiro, MBA, PMPStratech/TheProjectOffice

www.TheProjectOffice.nete-mail: [email protected]

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