Principles Of Risk Management
description
Transcript of Principles Of Risk Management
![Page 1: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/1.jpg)
T. Erickson © 2010 All Rights Reserved 1
PRINCIPLES OF RISK MANAGEMENT
5/18/2010
![Page 2: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/2.jpg)
T. Erickson © 2010 All Rights Reserved 2
DisclaimerAny opinions expressed in the following presentation are the author’s and do not reflect those of the Project Management
Institute or its Chapters.
5/18/2010
![Page 3: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/3.jpg)
“If anything can go wrong, it will.”
Murphy’s Laws, Number 1
“. . . And even if it can’t, it might.”
Barton’s Amendment
3T. Erickson © 2010 All Rights Reserved5/18/2010
![Page 4: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/4.jpg)
OVERVIEW
Principles The Basics Refinements Example
4T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 5: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/5.jpg)
WHAT IS RISK?
Risk: 1: possibility of loss or injury : peril 2: someone or something that creates or suggests a hazard 3 a: the chance of loss or the perils to the subject matter of an
insurance contract ; also : the degree of probability of such loss b: a person or thing that is a specified hazard to an insurer c: an insurance hazard from a specified cause or source <war risk>
4: the chance that an investment (as a stock or commodity) will lose value— risk·less \'ris-kl?s\ adjective — at risk : in a state or condition marked by a high level of risk or susceptibility <patients at risk of infection> Webster’s Online Dictionary
5T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 6: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/6.jpg)
WHAT IS RISK MANAGEMENT?
“One should expect that the expected can be prevented, but the unexpected should
have been expected.”Augustine’s Law of Amplification of Agony, (Number XLV)
6T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 7: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/7.jpg)
WHAT IS RISK MANAGEMENT?
Fundamental skill A management tool Hypothetical problem analysis
T. Erickson © 2010 All Rights Reserved
75/18/2010
![Page 8: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/8.jpg)
T. Erickson © 2010 All Rights Reserved 8
Management
Responses
Uncertainties
Plans
Goals
PRINCIPLES
5/18/2010
![Page 9: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/9.jpg)
EXAMPLE
Taking a Trip Goals Plans Uncertainties Responses Management
9T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 10: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/10.jpg)
GOALS“As you travel on through
life, Brother, whatever be your
goal, Keep your eye upon the
doughnut, Not upon the hole”
Mayflower Doughnut Shop, 1956
““If you don't know where you are going, you might wind up someplace else.”
Yogi Berra10T. Erickson © 2010 All Rights
Reserved
5/18/2010
![Page 11: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/11.jpg)
BASICS
Importance of a focus Knowing when you are there S.M.A.R.T.
11T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 12: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/12.jpg)
EXAMPLE - GOALS
Goal: Arrive at Grandma’s house for
Thanksgiving dinner by 4pm.
12T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 13: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/13.jpg)
PLANS
“The plan is nothing; planning is everything.”
Gen. Dwight D Eisenhower
“Living consists of figuring out what to do next.”
Unknown
13T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 14: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/14.jpg)
THE BASICS
Actions Conditions Assumptions Plans
14T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 15: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/15.jpg)
REFINEMENTS
Precedence relationships Hierarchies of plans.
15T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 16: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/16.jpg)
EXAMPLE - PLANS
Actions: Bake the sweet potatoes, pack the car,
take I-66, stop for lunch, take I-85 Conditions:
Dry road, get up on time, good health, available fuel
16T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 17: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/17.jpg)
UNCERTAINTIES
“Life is what happen to you while you are making other
plans.”John Lennon
17T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 18: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/18.jpg)
THE BASICS
Uncertainties Threat Opportunity Likelihood Impact Velocity Triggers
18T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 19: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/19.jpg)
REFINEMENTS
Identification Hypothetical problem analysis
Probabilities Consequences
19T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 20: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/20.jpg)
PROBLEM ANALYSIS
T. Erickson © 2010 All Rights Reserved
20
Problem
ActionAction Action
Condition
Condition
Action
Condition
Action
Condition
Time Now The Past
5/18/2010
![Page 21: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/21.jpg)
HYPOTHETICAL PROBLEM ANALYSIS
T. Erickson © 2010 All Rights Reserved
21
Time Now The Future
Goal?
5/18/2010
![Page 22: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/22.jpg)
EXAMPLE - UNCERTAINTIES
Threats Flat tire, rain, bridge out, run out of gas,
Opportunities New route, less traffic than expected
Events and Conditions
22T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 23: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/23.jpg)
RESPONSES
“Delay is the deadliest form of denial”
Parkinson’s Law of Delay
23T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 24: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/24.jpg)
THE BASICS
Mitigations Promotions Contingencies Exploitations Triggers
24T. Erickson © 2010 All Rights Reserved
Proactive
Reactive
5/18/2010
![Page 25: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/25.jpg)
REFINEMENTS
Prevention Mistake-proofing Controls Process Assets
25T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 26: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/26.jpg)
EXAMPLE - RESPONSES
Mitigations: Check tire conditions and spare; stay alert; service car before trip, fill tank at start
Promotions: Update maps, GPS data Contingencies: Spare tire, insurance,
AAA, extra gas can, cell phone Exploitations: New favorite restaurant
on the route.
26T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 27: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/27.jpg)
MANAGEMENT
“It isn’t that things will necessarily go wrong, but
rather that they will take so much more time and effort than you think, if they are
not to.”Wolf’s Law
27T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 28: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/28.jpg)
THE BASICS
Decisions, Decisions, Decisions. . . Priorities Tolerance
Nothing is so constant as change
28T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 29: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/29.jpg)
REFINEMENTS
Plan Priorities Mitigation /Opportunity Priorities Contingency/ Exploitation Priorities Risk Tolerance Mitigation/ Contingent Action Tolerance
29T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 30: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/30.jpg)
EXAMPLE - MANAGEMENT
Decisions: Plan: Should I try a different route? Mitigation: Should I buy new tires? Get a new car? Contingencies: Should I update my AAA
membership? Should I buy a GPS? Changes:
Assumptions: Do I need to remind my brother to bring the green bean casserole?
Conditions: Do I need to worry about the weather?
30T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 31: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/31.jpg)
T. Erickson © 2010 All Rights Reserved 31
Management
Responses
Uncertainties
Plans
Goals
WRAP-UP
5/18/2010
![Page 32: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/32.jpg)
FINAL THOUGHTS
Risks are not Problems Risk Management is not
optional - or avoidable! If we work at it hard enough we
can make it really complicated!
32T. Erickson © 2010 All Rights Reserved
5/18/2010
![Page 33: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/33.jpg)
Murphy Lives!
Be Ready For Him!
33T. Erickson © 2010 All Rights Reserved5/18/2010
![Page 34: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/34.jpg)
Questions?
34T. Erickson © 2010 All Rights Reserved5/18/2010
![Page 35: Principles Of Risk Management](https://reader033.fdocuments.net/reader033/viewer/2022061218/54b60dfd4a7959b45c8b4569/html5/thumbnails/35.jpg)
T. Erickson © 2010 All Rights Reserved 35
Contact Information:
Tom Erickson, P.E., PgMPAn Enterprise AgilistEmail: [email protected]: 703.201.0021
5/18/2010