Risk Response Strategies for Negative Risks or Threats

PM Center Insider

By Fahad Usmani, PMP®, PMI-RMP®, contributing blogger

Fahad Usmani

Fahad Usmani, PMP®, PMI-RMP®, is founder of PMstudycircle.com and the author of A2Z of PMP Certification Exam. He has over 10 years of global portfolio management experience, specializing in leading complex corporate projects. He currently serves as an Inspection Engineer in Kuwait and facilitates project management training programs throughout the Middle-East.

As we know, risks are not always bad; sometimes they can bring some opportunities as well. Negative risks or threats have a negative impact on the project objective and positive risks have a positive impact on the project objective.

Therefore, risk response strategies to manage positive and negative risks are different.

In the PMBOK Guide, we have following strategies to manage negative risks:

  • Mitigate
  • Transfer
  • Avoid
  • Accept

The following strategies are used to manage positive risks:

  • Enhance
  • Exploit
  • Accept
  • Share

In this blog post we are going to discuss the negative risk response strategies in detail. For the positive risk response strategies, refer to my next blog post.

Okay let’s get started.

Mitigate

In this type of risk response strategy, you try to minimize either the probability of the risks happening or the impact.

For example, you find that a team member from your team may leave for a certain duration during the peak of your project. Therefore, to minimize the impact of his absence, you identify another employee with similar qualifications from your organization and inform his boss that you may need him for your project for a period of time.

Transfer

In transfer risk response strategy, you transfer the risk to a third party to manage it. Please note that the transfer of risk does not eliminate the risk; it only transfers the responsibility of managing the risk to the third party.

For example, in your project there is a task to install some equipment and you don’t have much experience in this type of task. Therefore you ask a contractor to come and install it and sign a fixed-price contract.

In this way you have transferred the responsibility of the whole task to a third party, and now it is his responsibility to complete the task within the agreed time and cost.

Avoid

Here you try to eliminate the risk or its impact on your project objective. You do this by either changing your project management plan, by making some changes to the project scope, or by changing the schedule.

For example, you observe that during certain periods of your project there is a chance of rain and you have some work planned outdoors at that time. Therefore, to avoid this risk, you move these activities to some other time to avoid the effect of rain.

Accept

This risk response strategy can be used with both kinds of risks, i.e. either positive risks or negative risks.

Here, you don’t take any action to manage the risk but you do acknowledge it.

You can accept the risk either by actively acknowledging it or passively acknowledging it.

In active acceptance you keep a separate contingency reserve to manage the risk if it occurs, and in passive acceptance you do nothing except note down the risk.

Summary

You have four risk response strategies to deal with negative risks. You will select the strategy to manage the risk depending on the type of risk. If you see that you can manage the risk, you will go for the mitigation risk response strategy. If you see that a third party is better equipped to manage the risk than you, you will go for the transfer risk response strategy. If you find it difficult to manage the risk in any way, you will avoid it. And in the accept risk response strategy, you just acknowledge the risk and note it down and decided to manage it only if it happens.

The Road To Becoming a Certified Professional

PM Center Insider

The Road To Becoming a Certified Professional

By Emad Rahim, Kotouc Endowed Chair of PM Center of Excellence  

Emad Rahim

Dr. Emad Rahim, PMP®, OMCP®, serves as the Endowed Chair of the Project Management Center of Excellence and Associate Professor for the College of Science and Technology at Bellevue University. He has earned fellowships at Fulbright, Beyster Institute, Kauffman Foundation and the Jack Welch Management Institute, and has been invited to serve as a Visiting Scholar at Rutgers University, Oklahoma State University and Syracuse University.  He co-authored Foundations of Social Responsibility and Its Application to Change, Leading Through Diversity: Transforming Managers Into Effective Leaders, and The 4-Tions: Your Guide to Developing Successful Job Search Strategies. Emad has also contributed columns for Forbes, CEO Magazine, IntelligentHQ and TweakYourBiz.com, and has been featured in the Huffington Post, US News & World Report and NY Post.

Connect with him on Twitter @DrEmadRahim

While the objective of a degree program is to help students build knowledge and skills in a particular area of study, a certification program goes beyond that. Degree programs must meet standards set by regional and national accrediting organizations, the Department of Education and state licensing agencies. In an engineering, project management, or computer science program, for example, you’ll gain a thorough education. At the same time, these disciplines have industry-related certifications, and though you may complete a degree program, you’re not guaranteed to successfully pass a corresponding certification exam.

The typical full-time accounting student pursuing a master’s degree, for example, completes education in topics like business accounting, statistics, economics and financial management for two or three years, but along with hundreds of other accounting students, a graduate still has to pass the CPA exam to become a Certified Public Accountant. Certification exams specifically test for professional competencies and knowledge gained outside of your college education. They often require you to have significant career experience within your discipline, perhaps along with professional references and other requirements beyond those needed for graduation from a degree program.

Here are other examples of professional certifications that require a significant amount of study hours after earning the academic degree:

PE (Professional Engineer): http://ncees.org/exams/pe-exam/

PMP (Project Management Professional): http://www.pmi.org/en/Certification.aspx

PHR (Professional in Human Resources): https://www.hrci.org/

Also law students must pass the Bar exam after graduating before they can practice law, and there are dozens of medical licenses and credentials for those pursuing a career in healthcare.

On the other side of a professional certification, however, are some real advantages: employers respect the accumulated years of high-level work that underlie a certification, and they see you as more accomplished in your field than the average graduate. Certifications are based on having relevant experience in addition to college knowledge, and they let employers know you can get the job done well.

If you’re interested in pursuing a certification after earning your degree, keep  in mind that you may first need to put a few years into your field to gain the kind of real-world understanding it takes to pass the exam. Make an excellent name for yourself in the small pond of your professional career, and you’ll be poised to move ahead of the class as a certified professional.

Leadership for Project Managers

PM Center Insider

– Interview with Dr. Casey Reason, Best-Selling Leadership Author and PM Center Faculty

By Emad Rahim, Endowed Chair of PM Center of Excellence  

Dr. Casey Reason profile

Dr. Casey Reason is an author, speaker, trainer, and innovator who uses the new science of learning to train leaders and inspire lasting innovation. He’s also the president of an internationally acclaimed company that’s been designing innovative virtual learning systems since 2001, and formally served as a program Chair for Ken Blanchard College of Business. He is author of Stop Leading Like It’s Yesterday: Key Concepts for Shaping Today’s School Culture and 100 Days to Leadership Impact, and teaches leadership and communication for the Project Management Center of Excellence.  

You specialize in teaching leadership. Can you tell us how leadership skills are important to project management? 

Leadership skills are essential to project management in two important ways. First, in conceptualizing a project and its execution requires the ability to have vision and to understand both how systems work and how individuals within that system make it work. The ability to conceptualize that represents a leadership skill associated with vision that is very important. Secondly, the management or execution of a project requires the capacity to be flexible, make judgements, and certainly work towards maximizing the performance of others. Clearly just having a project plan isn’t enough. The human factor associated with higher levels of performance or other variables are significantly impacted by a leader’s ability to get the most out of others and to maximize the potential for performance.

How do project managers use leadership? Could you provide some examples in when leadership is important on projects? 

In many cases project managers may have to make either a minor or significant adaptation either to the plan itself or with respect to how participants are going to approach these specific challenges. A project manager who lacks leadership may simply seek to execute the plan exactly as it is written and/or may not take into account these essential differences in plan execution based on performance. Good leaders, however, execute their projects with these subtle demarcations in mind.

If leadership skills are so important for project managers why do you think so many companies overlook it when assigning a person to lead a project? 

We sometimes feel more comfortable talking about project management over leadership because of the fact that it is more tangible. In general, human beings are more comfortable with things they can actually see, feel, and specifically relate to. It is easier, for example, to examine the relative sanity of organizational charts and job descriptions rather than dealing with the leadership skills that are required to make them effective.

You have written and conducted extensively on the topic of leadership, where do you see the project management profession going in the next 5 years? 

In my newest book I talk about collaborative teams and the use of technology in virtual connectivity to shape progress and goal attainment. Without question, in the next five years more of our project are going to be executed using these technologies and this ability to connect and communicate will continue to shape the work of leaders and project managers. In the future, leaders will have to become increasingly adroit at managing large projects at a distance wherein most or all of the participants have never met each other and in some cases haven’t even spoken to one another in synchronous conversation. Getting conformable with asynchronous communication and making sense of those communications will pay significant dividends in the future.

Can a person without a traditional project management background or with a lack of leadership skills get into the profession? Can you provide some guidance?

The simple answer is no. You simply cannot do a competent job in project management without some project management experience and training. You also need some leadership experience as well. This doesn’t mean, however, that you necessarily have to have a degree or credential in these areas to be effective. As is the case with almost any learning objective, salient outcomes can be achieved when people roll up their sleeves and work hard. Indeed there will continue to be opportunities for competent project managers who come to the position with perhaps far less experience in training than others. Their work, however, will be made more difficult and in some cases they will certainly have to go back and redouble their efforts to learn those things that they were lacking in the first place. Training is required. There are obviously allowances and flexibility in how we get that training.

PMP Exam Tips and Preparation

PM Center Insider

– Interview with Fahad Usmani, PMP®, PMI-RMP®, contributing blogger

By Emad Rahim, Kotouc Endowed Chair of PM Center of Excellence  

Fahad Usmani

Fahad Usmani, PMP®, PMI-RMP®, is founder of PMstudycircle.com and the author of A2Z of PMP Cert Exam. He has over 10 years of global portfolio management experience, specializing in leading complex corporate projects. He current serve as an Inspection Engineer in Kuwait and facilitates project management training programs throughout the Middle-East. 

 

When did you earn your PMP credential?
I passed my PMP exam on Dec. 13, 2010.

How did you prepare for the exam?
I began the PMP certification process without ever having referenced a sample PMP preparation book or the PMBOK® guide. I was starting from ground zero. So in December 2009, I attended live classroom training to earn the 35 contact hours training program certificate.

Did that adequately prepare you to take the PMP exam?
No, it did not. My lack of preparation was embarrassing. It was difficult for me to absorb the concepts being presented and there were also instances when I couldn’t participate in the discussion because I just didn’t have enough baseline knowledge.

So, you recommend students do some advance preparation before attending a live training program?
Yes, otherwise you will not get much out of the training and may feel uncomfortable.

How do you suggest students prepare?
During the training program I was given the Head First PMP Exam preparation books. Initially, I did not like the book; however, as I started reading it, I found its approach to be very easy and engaging. I strongly suggest getting the book to understand basic project management concepts.

Beyond this, it’s important to make time to prepare for the exam. I personally experienced a few ups and downs during my preparation. There was a time when I lost my enthusiasm, which paralyzed my studying. But the clock was ticking. There are time-sensitive eligibility requirements so you can’t procrastinate.

Finally, I got serious. I scheduled the exam and gave myself three months to prepare. Putting a date on my calendar was like a spark. I became more enthusiastic about my preparation and that momentum helped me tremendously.

What was it like on exam day?
On my scheduled exam date, I reached the Prometric Test Center half an hour early. Do this! It takes about 15-20 minutes to check-in and you want to avoid being rushed or stressed during that time. After check-in you’re allowed to enter the testing room.

It took me 2-1/2 hours to complete the exam, and I used the remaining time to review my answers. Once I submitted the answers, I was asked to complete a brief survey about my test-taking experience and then… Congratulations! I was able to see immediately that I passed the PMP exam.

What were your favorite study books?

Any final advice? 
Yes. Here is a quick checklist of things to do before taking the exam:

  • Become a member of PMI and actively seek out other PMP’s so you can learn from them.
  • Buy any two good PMP exam reference books to study so you can learn from different perspectives.
  • Read the PMBOK® Guide, at least three times.
  • Get 35 contact hours from any registered training provider.
  • Apply for the exam, schedule it, and then develop a study plan.
  • Rather than attempt to memorize everything, like the Input, Tools & Technique and Output (ITTOs) in the PMBOK® Guide, focus on understanding the logic behind the project management principles.
  • Pay special attention to Initiating and Closing Process Groups. These are the smallest groups and each group contains only two processes.
  • Don’t over study by trying to answer every sample question you may find on the Internet. Only rely on authentic sources for sample questions and exams, like your reference books or samples taken directly from the PMI website.

I hope these insights are useful as you work toward earning your PMP credential. To learn more about Fahad Usmani, visit his blog.

Project Management in Retail with Dr. Amine Ayad

PM Center Insider

– Interview with Dr. Amine Ayad, Senior Director of Strategy & US Innovations at Walmart Corp. and PM Center Faculty

By Emad Rahim, Kotouc Endowed Chair of PM Center of Excellence

Avad_Amine_010_RC-1
Amine Ayad

Dr. Amine Ayad has over 20 years working in the retail industry. As an entrepreneur and civil engineer, has successfully launched companies and negotiated exclusive representations, contracts and partnerships both nationally and internationally.

Currently, Amine serves as Senior Director of Strategy – US Innovations at Walmart Corp., and he is a faculty member of the Project Management Center of Excellence. He formerly held senior management positions at Sears and Home Depot, and is co-author of the best-selling book, Leading Through Diversity: Transforming Managers Into Effective Leaders.  Connect with Dr. Ayad on Twitter at @Dr_Aya

You specialize in retail management. Can you tell us how project management skills are important in the field of retail?

A: Project Management is vital to the success of retail businesses and retail professionals. Opening a new store requires advanced project management skills, executing a promotion requires project management skills, and even improving a process requires project management skills.

What other business related work do people use project management in your industry?

A: Think about the life-cycle of products that customers buy from a retailer; say a backpack for back-to-school season or a toolset for Father’s Day: The buyer has to anticipate future demands and place orders to arrive to distribution centers on just in time. Distribution centers have to schedule trucks, and drivers to distribute the inventory to stores. Stores have to schedule employees to unload the trucks and properly place the items on the shelves exactly where the items belong. And have the right amount of registers open for the customers when the customers arrive. All of this requires tremendous amount of planning, executing, monitoring, and closing and / or correction of errors to initiating the work again and repeating the cycle.

Within each of these activities multiple projects could exist simultaneously. For example, recruiting, hiring and training the right number of employees to meet the business demand of Black Friday is a critical activity that requires project management skills. Changing the planograms or merchandise on the selling floor to reflect the right time of the year and / or the right event requires significant project management skills.

Can you give us some examples of retailers that are applying project management to improve their business model?

A: Retailers that adopted Enterprise Project Management mindset treat every process as an independent project. This way not only they can track and monitor individual projects but also better understand how each project relates and / or impacts other projects within the business model. This helps executives to select and focus on initiatives that add value and / or fit the competitive objectives of retailers.

Within this philosophy project management isn’t solely the responsibility of project managers; every employee becomes part of a specific project and responsible for executing specific tasks within specific projects in a systematic way that adds efficiencies and effectiveness. Imagine the benefits that such organizations can harness:

  • Collaboration among different projects
  • Enterprise-wide reporting at task level if needed
  • Centralized documentation and improved compliance
  • Monitoring and measuring returns on investments and benefits of initiatives
  • Not exceeding budgets, mitigating risks, and / or not missing deadlines
  • Maximizing the potential of organizational resources

Personally, I used project management principles and methodologies in my retail assignments as a Retail Employee, Store Manager, District Manager, Divisional Director of Merchandising, and Senior Director of Strategy and Innovations.

You have written and conducted research on the topic of leadership and project management, where do you see the profession going in the next 5 years?

A: Project management tools are not new and project managers have been using standardized methodologies for managing projects for years, but the future is exciting.
Technology will offer new and powerful tools to help in every phase of project life-cycle.

– Imagine the power of the “learning machine” in planning a new project when all learning from all projects are utilized to plan for a project.

– Imagine the power of the “cloud” in providing infrastructure for different project.

– Imagine the power of “big data” and “advanced analytic” coupled with the power of mobile technologies and internet in providing accurate and real time monitoring and reporting.

This is not a view from a distant future, it is happening as we speak. Today, managers and executives don’t have to be behind their desks in an office reviewing data and reports while separated from front-line employees and customers. They can review reports and data while on a plane traveling to a business unit and / or while on the selling floor or production floor reviewing the execution of business initiatives.

Can a person without a traditional project management background get into the profession? Can you provide some guidance?

A: Absolutely! Companies and universities offer training programs leading to obtaining project management skills and / or professional certifications. Even without formal education, many entry level jobs exist within organizations including but not limited to: Project analyst, project coordinator, and / or assistant project manager. If a person is entering the workforce and / or planning a career move, project management can be a great option.