OLD SCHOOL
In most textbook approaches, risk is defined as ‘some unwanted event’ and/or the cause of such an event and/or the probability of such an event.
What defines any event as unwanted is an open question, and you’re free to fill it in as you see fit. This makes creating a “risk register” an activity that is open-ended and subject to the creativity (or lack thereof) of the person(s) creating that register.
Measuring risks is another topic that is full of complexity, and a very popular approach is to create a “heat map” where the risks are scored as low/medium/high on the twin axes of ‘probability’ and ‘impact’ and then those risks that score highest on the combined rate of ‘probability times impact’ deserve the most attention.
For some groups of hardliners who propose a strictly quantified risk approach, this has given rise to scores of formulas and calculations with dollar values and advanced statistics, suggesting a level of accuracy that is hiding the assumptions of any risk model as well as either ignoring or else grossly underestimating the mathematical limitations of your average stakeholder and project manager. Read “Thinking, fast and slow” by Daniel Kahneman if you’re not sure what I’m referring to.
NEW SCHOOL
The G:P Project Card Game conceptualizes risk as “friction” between any two areas of the Project Canvas. This innovative approach has two very clear benefits:
- Creating a “risk register” becomes easy.
You don’t have to worry about missing or forgetting about any risks, because the “types of risk” can be enumerated: there are 66. Creating your actual risk register is then a matter of describing the shapes and variations that may arise in each of those basic 66 types of risk. Brainstorming these shapes and variations will make your risk register more precise or more detailed, but it will always be complete in the sense that no ‘type of risk’ can be forgotten.
- Measuring risk becomes easy.
You don’t have to construct any “indicators” of risk nor worry about the validity of indicators and their sensitivity to false positives or negatives. You only have to agree with your stakeholders on a common understanding of the ‘level of friction’ between the two areas of the Project Canvas for any specific “type of risk”. You play the Project Card Game and have a team discussion to agree on what that level of friction is. You’re not aiming for any scientifically based formula or mathematical level of precision – it is sufficient to have alignment between stakeholders, because the only thing that matters is your decision if any intervention is needed or not.
The “types of risk” in the Project Card Game are described in the Vulnerabilities Matrix, which cross-references all Project Canvas areas against one another.
For ease of use, the Project Card Game does provide a scale of 0%-100% to indicate the level of friction. The importance of using this scale however is not to suggest numerical accuracy, but to channel the team dynamics in two specific ways:
- If any participants in the Card Game have a vastly different gut feeling of the ‘percentage of friction’ then this serves as a starting point to discuss. This works exactly like “planning poker” where you start with writing down individual estimations and then compare. Any large difference in estimations between two or more individuals is indicative of an ‘information gap’ between participants and thus a starting point for discussion.
- As soon as participants converge an any ‘percentage of friction’ that feels OK for them, then this is a token that sufficient alignment has been reached to start making decisions on possible interventions to manage the risk. The fact that the team is converged on that ‘percentage of friction’ will make such decisions shared decisions, and will also make it easier to agree on the costs that are appropriate to spend on such interventions.
The ‘percentage’ then functions as a yardstick for the (implicit or explicit) cost/benefit analysis of possible interventions, without resorting to dollar calculations and statistics.
Using the Project Canvas as your “map of the project world” and then seeing (types of) risk as ‘friction’ between any two areas of this canvas will give you an innovative approach to risk. The key benefit: it makes risk management easier.