Tuesday, March 18, 2008

Risky business - Part 3

Read Part 1 and Part 2

When analyzing project risks, we identify the worst thing that could happen, then the second worst thing, then a few more. We give each risk a number to indicate it's severity, then we multiply it by the probability to come up with a rating. And that rating determines how much effort we put into either avoiding the risk, taking steps to minimize the impact or coming up with an alternative plan.

When the probability and severity are both low, we usually just accept the risk because even if it happens, it won't be too bad. When the probability is low, but the severity is high, we give that more thought and planning. And you can bet that if the probability and severity are both high we are really going to have a good backup plan.

That's all the project team can really do, and it works fine most of the time. But then there are those times that something happens that nobody could have possibly foreseen. And all you can do at that point is deal with it.

And that's what we have to do in real life, too.

We make our plans and manage the risks and live our lives. Every day we make choices, thinking we know where those choices will take us. But if we are wise, we also know that anything can happen, even the very worst thing.

And it can happen in a moment.