I just listened to a CIO Radio interview with Tom DeMarco and Timothy Lister, associated with their new book Waltzing with Bears: Managing Risk on Software Projects. While their focus is software projects, I don't think the concept of managing risk is different in pharmaceuticals or construction or anywhere. Granted, the knowledge about the size of the risk or the uncertainty associated with a given project or given steps within the project may be quite different. But risk must be managed all the same to continue competing in the market. DeMarco and Lister also acknowledge the importance of dealing with risk at the individual project level as well as at the portfolio level.
Some interesting quotes / paraphrases:
- "No one believes the end date of a project." For very risky projects, this end date could be a range of months or even years. For well-understood projects, this uncertainty might only be a range of a few days or weeks.
- "Project management tools only map the known future. They know nothing about unknowns and risks, and they give us the illusion that we know what is going to happen."
- "Managing by objectives (dates) is dead wrong. Simply elevating the importance of a date won't make it more likely."
- We talk about the perils of late delivery, but we forget to "discuss the perils of starting projects late" due to the concern that the market won't be interested in the product.
Since I have been working with critical chain project management for the last few years, it is obvious to me that most of these issues can be handled via CCPM. The whole idea behind the philosophy is to build projects with an understanding of the associated risk, and build your portfolio with this uncertainty in mind. One aspect that may be missing is the risks associated with simply being in business: competitor gets to the market before you; government regulation; etc. That requires another level of risk management above CCPM.
If the above link to the recorded program doesn't work, head to CIO Radio and look for the DeMarco and Lister interview from 5/01/03.