Project Risk and Opportunity Management

Authors: Agnar Johansen ; Nils OE Olsson ; George Jergeas ; Asbjorn Rolstadas .

One issue the authors are addressing seems to me to be the shortage of opportunity management in project management, while risk management is constantly evolving. They focus on a very large number of aspects of project management, which are always concisely discussed. Their starting points are that projects are to be successful, and what that means for the project, the parties that make up the project and what the contact points are with all other management points of attention. One conclusion is: the mindset must change.

According to the authors, a project is successful if this is the case in 3 areas, namely :

– Project objectives

– Business objectives

– Social objectives.

If we see the social objectives as achieved, we arrive at the following schematic overview:

Project goals achieved?
Yes No
Achieved your business goals? No Wasted investment Failed project
Yes Successful project Limited return on investment

 

Project challenges in the oil and gas industry are:

– The project costs that run up to 100%.

– The percentage of the engineering design that is complete before approval is given to commence expenditure ranges from 15% to 80%.

– The poor team performance due to a misalignment between management and the project team, and a lack of communication.

– A decreased competence of all project teams (owner, engineering , construction and manufacture): there are no “A” teams anymore.

In order to meet the project challenges from the start, the owners must take the time to define and plan the project. For example, they must:

– Appoint the right people to represent and advise them; they must be qualified, experienced and capable of working with others.

– Understand the internal and external risks and opportunities involved in the project, quantify them and make financial provisions.

– Clarify time schedule, cost and quality.

– Charging project costs over the entire life cycle of the project, not just initial costs of the construction.

– Ensure that the financial and other resources required for the project are available when needed.

– Ensure compliance with legal obligations and regulations.

– Monitor progress and performance with a focus on emerging opportunities and risks.

For all involved, the motivation behind the project is value creation. Important for creation of value is that the project (executing) organization brings business objectives into account, in addition to the project objectives, to understand the rationale for the project and that it works in the best interest of the owner. He, in turn, has to monitor the project closely and understand the interest of the business of the implementer (executive organization).

There are often conflicting interests between the owner and the implementing organization. Therefore, an agreement must be sought.

However, society also always has an interest in the project, for value creation from their point of view, e.g. through job creation.

These different points of view of value creation, i.e. different interests between these three parties, are the cause of each time a different view of opportunities and risks in the management process.

That brings unpredictability into view.

Unpredictability in projects is due to uncertainty . Uncertainty can be defined as any lack of information. Uncertainties lead to risks and opportunities in projects. So it is important to know the nature of the uncertainties. These are the ( un ) known ( un ) knowns .

Every uncertainty has one or more of the following causes:

– Nature

– Man

– Technology

The uncertainties of nature in projects have a low frequency but have a huge potential impact.

The uncertainties in projects caused by humans include the behavior of individuals, as well as the decisions made within and between organizational units. It stems from the behavior of the stakeholder (s) of the project. Project management may not be able to fully understand their rationale, motivation and business interests.

The uncertainties in projects that arise from technology concern the potential malfunctioning of equipment and systems. This can be based on design errors, damage incurred during transport or storage before it is deployed in the project, construction errors, poor testing, machine breakdown, … Usually these can be traced back to a human error.

Uncertainty management involves the change management that occurs throughout the project life cycle, to correct errors and unrealistic or unfeasible design , to comply with laws and regulations, to ensure occupational safety and to maximize the benefits of the project (by reducing risks and exploit opportunities).

Risks appear spread over time. Projects that seemed healthy at first can suddenly become unmanageable. Risks combine and interact to end up in chaos. Many risks are linked to the life cycle of the project. Risks with a link to legislation, e.g. can disappear quickly after approval for the project has been granted. Technical risks decrease as engineering follows. Some risks, especially the market-related ones, go further as they are independent of the life cycle. Global market risks are beyond the reach of virtually everyone involved. By removing risks in this way, you can create opportunities.

New opportunities can arise throughout the project life cycle. These can be internal conditions, such as: better competencies of employees, effective working methods, better or more resources available. It can also be external conditions, such as collaboration with other planned projects in the vicinity, so that the business generally saves time, but also for the user, such as installing sewerage during earthworks for road works … It can also save money by working together making purchases from a common supplier, or purchasing new products that make the work easier for several parties or guarantee better quality. This may require the project manager and owner to allow changes to the original project plan. However, there may be a risk that something will fail when an opportunity is exploited. In that case, active involvement, knowledge and authority are required of the management to allow the benefits of the opportunities to materialize.

Project management is also related to innovation management. Innovation is often used to mean something new, as a product, service, or output, and / or a new process, procedure or method. We add that innovation is also identifying and creating opportunities in projects. Also, identifying and creating opportunities, allowing them to materialize and reap their fruits can encourage innovative and creative thinking in organizations.

At the end the authors are talking about the changed mindset in the industry: Industry Best Practices : an adaptive and aggressive approach.

The adaptive approach is a flexible planning philosophy with a lot of authority delegation to the project team, which allows them to make qualitative and time saving decisions ‘on-the-spot’ without having to refer to a higher authority, and without fear of ‘blame & shame’. This agile planning is needed continuously throughout the project, starting with a moderate upfront effort, followed by continuous updates at a lower level, providing the opportunity to make quick decisions. This creates the opportunity for project managers to anticipate future problems, make an evasive maneuver for them, scan for future opportunities, and make the necessary changes for them.

Sometimes an offensive method is needed to push voluntary change, thereby adding value to the business value over the project life cycle. This approach is perhaps best demonstrated in disaster response / recovery projects. These situations represent the need for diversity in project delivery: the project manager makes the best on-the-spot decisions regarding work logic, procedures, schedules and changes. The project manager challenges the limits of the project and the limited authority of his team.

Effective Opportunity Management for Projects – Exploiting Positive Risk

Author: David Hilson

Released in 2004 , with references to texts from years earlier, but still blazingly topical, underused and under-studied : opportunity management as part of risk management. Benefits management for projects in this case …

The author advocates embedding opportunity management in existing risk management that focuses too much or only on threats. His argument for doing this is that they are two sides of the same coin called uncertainty. The fact that at present in a number of standards the uncertainty of the achievement of the goals may imply either a positive deviation or a negative deviation from their achievement, is underused and too little known in today’s companies.

Throughout reading, it is discovered that it can indeed be incorporated into a single management process, provided a number of minor extensions to existing threat management. This makes the book really to be not just regarded as a mere opportunity management process description: it is in fact a possible comprehensive risk management process description with some tips and tricks. This actually shows that the expansion of threat management with the management of opportunities entails virtually no additional work, but can potentially be very profitable in terms of ROI.

In order for it to succeed, the author sees four CSF (critical success factors) as follows:

  1. You need to know what you mean by the word “risk”.
  2. You have to know how to do it in practice.
  3. You need the right support: people, resources, methods.
  4. A person must know how he thinks and reacts in order to be able to adjust risk behavior.

One possible conclusion after reading is that it is always an advantage to engage in benefits management. People are often too focused on problems.

The fact that this work is written for projects does not detract from the fact that many ideas are valid in the management of processes.

The Intelligence Trap – Revolutionise your thinking and make wiser decisions

Author: David Robson

Very important in making decisions is a psychological view of one’s own leadership. Namely a view that prevents you from falling for the “intelligence trap”. What exactly is that?

In fact, the intelligence trap is a direct result of some people’s inability to think outside of their expectations, to come up with an alternative view of the world where their decision is wrong rather than right. People with very high intelligence are more subjected to this than people with moderate intelligence. Nobel laureates sometimes suffer from this, so often that there is a term for it: “Nobel disease ”.

An active intervention to this pitfall can make use of so-called “ evidence- based wisdom ”. This can be imparted to all ages and to anyone, although one is more likely to benefit from it with moderate intelligence.

A first step is to understand what wisdom is. A definition of “wisdom” is: “he is wise who recognized the limits of his own knowledge” (Socrates) . Apart from that, good factual knowledge and training remain important.

Very dangerous is the fragility of the expert. For example, by relying heavily on schemes and protocols, which one must have, he may have trouble adapting to changes in the environment. Flexibility is therefore important. Personal bias is also a problem. One step towards a solution is to adapt the own thinking. This can already be done by reading about it, with inspiring examples. Placing a beginner with another, detailed, view is also an advantage because he or she does not yet know the patterns and therefore sees and can indicate differences in details of the case with regard to the general rule. It can also be done by taking a distant position. An example of this is the listing and quotation of important aspects of a situation or object, spread over several days. In addition, being able to listen to your own emotional compass is an advantage. This has to do with being able to relate the events in your environment and your (gut) feeling in the right way. After all, being able to spot deliberately crafted bullshit is a necessary skill. To this end, the author provides a list of some methods by which false truths are sometimes told.

What can save us from the pitfall are: cognitive reflection, intellectual humility, active “open- minded ” thinking, curiosity, refined emotional awareness and a “ growth mindset ”. We find these things in the nine virtues of the Intellectual Virtues Academy. These are divided into three categories as follows:

Getting started

Curiosity: the opportunity to be amazed and to investigate and ask the “why” question. A thirst for understanding and a desire to explore.

Intellectual humility: the willingness to recognize one’s own limits and mistakes, regardless of intellectual status or prestige.

Intellectual Autonomy: Having the ability for active autonomous and self-guided thinking. The ability to reason and think for oneself.

Executing well

Attention: to be there with your thoughts 100% on the matters of the learning process. Keep distractions at bay. Be with the thoughts and commitment completely on top of the topic.

Intellectual carefulness: the ability to notice and avoid intellectual pitfalls. A commitment to accuracy.

Intellectual thoroughness: the ability to seek and find explanations. Dissatisfaction with rather apparent or superficial and (too) simple explanations. Reaching for a deeper meaning and understanding.

Handling challenges

Open- mindedness : an capacity to think outside the box. Responds honestly to competing perspectives.

Intellectual Courage: Being ready to persevere in thinking or communicating with the risk of fear of being embarrassed or of failure.

Intellectual tenacity: a will to face an intellectual challenge and struggle. Keep your eyes on the prize and don’t give up.

These aspects of the eternal learning mindset apply to an individual, but how do you put together a ‘dream team’? It depends.

If you have a team where everyone has to do things clearly separately, without overlapping job content, then you can use a team of top players: there is no competition.

If you have to put together a team of competitors, where there is overlapping job content , then it is important that they are not all toppers, only about 60% are toppers, but then teamwork, being in tune with each other, weighs more.

With a crisis team, any type of crisis team, it’s the best of both worlds. In a CRT (Crisis Respons Team), for example the company fire service team, it is clearly the second. At a CET (Crisis Expert Team, where a team member might handle a file from A to Z , it might be the first. But with the CMT (Crisis Management Team), where there is little or no overlap between the participants, but there is still a need to work together because people must be able to rely on each other’s results, it is a pure cross: you need 100% toppers, but they also have to be able to work with each other. In the latter case, intellectual humility is an issue, because in this team one often has to deal with high profiles who “know very well what they are worth”. Antibodies against this are exercises in which people learn to share information and are assessed on the integration of each other’s point of view in their own thinking.

A change of mentality that can be useful to contribute positively to this is to initiate discussions throughout the hierarchy, between the different layers of the hierarchy, and to recognize and hear people as experts in the field of, for example, their own ideas about occupational safety.

Also not to be ignored is the use of statistics from near misses. After all, it has been statistically proven that a serious event is preceded by a number of near misses. That was the case with the Challenger , with the Columbia, (NASA) but actually also Covid-19 was preceded by, among others, SARS and MERS. There was a failure to learn lessons and to implement them into the future, or to persist in these lessons learned. For that you need the mentality of a “high reliability ” organization. It has been shown for this type of organization (research by Karl Weick & Kathleen Sutcliffe ) that they exhibit the following characteristics:

Expect to Fail: Employees go to work and every day can be a bad day. But the organization rewards employees for reporting their mistakes.

Reluctance to simplify interpretations: employees are rewarded for questioning assumptions, and for being skeptical of the wisdom of others.

Sensitivity to operations: Team members continue to communicate and interact to increase their understanding of the situation and look for the actual origin of each anomaly.

Commitment to resilience : acquiring the necessary knowledge and resources to bounce back after a negative event. This includes the ‘pre mortems ‘ and the discussions of near misses.

Respect for expertise: here the open communication between different layers of the hierarchy is important, and the intellectual humility of those at the top.

Tribal Leadership – Leveraging Natural Groups to Build a Thriving Organization

Authors: Dave Logan; John King; Halee Fischer-Wright

The authors indicate that you can recognize tribes  in your organization, and what level of culture these tribes can have. The latter you recognize on the basis of language use by the members of the tribe.

But first you need to know what a tribe is. A tribe is any group of 20 to 150 people who know each other enough to stop on the street and have a chat. They often correspond to the people in your email address book and your smartphone. Often a small company is a tribe, often a large company is a tribe of tribes. A small tribe (20 people) often has only one culture, a (medium to) large tribe (50 to 150 people) can have multiple culture levels at the same time.

Tribal leadership is leadership that focuses on the language and behavior within a culture. It does not seek to sharpen cognitions, beliefs, attitudes, or other factors that we can only measure indirectly. It does focus on language use, behavior and relationship structures. To start this leadership, the leader must start practicing two things:

  1. The tribes tell him their level of culture through their language use.
  2. Upgrading the tribes to a “higher” culture level.

The authors’ research shows that the use of the following vocabulary is typical of the culture levels:

Stage Mindset Word usage – examples
1 Life sucks – clusters of ‘gangs’ – alienation Life, sucks, interrupts, can’t, stop, whatever
2 My life sucks – clusters of apathetic victims – separated Boss, life, trying, can’t, give up, quit, sucks
3 I’m great – “lone warrior”, culture of the “wild, wild west” I, my, my, job, profession, do, did, have, went
4 We’re great – radiating tribe pride relations as a partnership We, our team, do, they, have, did, committed, value
5 Life is great – innocent wondering, relations in teams Wow !, miracle, happy, vision, values, we do.

 

In addition, they also provide a number of tools with which you can upgrade from a group of a “lower” culture level to a “higher” culture level. The success factors that you have to look out for are the words that the tribe will use during their evolution to a higher level. In doing so, the leader must again keep two things in mind:

  1. The tribe must rise systematically stage by stage, it cannot skip a stage.
  2. The tribe has to master the stage for a while.

Levels from level 1 to 2:

  • The person has to see it and want it. Go where the action is: eat with colleagues, go to meetings, take up social functions …
  • Encourage a break with others with a “life sucks” mentality

From level 2 to 3:

  • Encourage making friends in dyadic (two-person) relationships.
  • Encourage friendship with people in late stage 3.
  • Show her that her work makes a difference.
  • Show what her strengths are within her competences.
  • Show her growth potential that she still has to acquire, but keep it positive.
  • Give her projects that she can do well in a short time. Don’t follow it too closely.

From level 3 to 4:

  • Encourage triads (three-person relationships).
  • Let her get to know others with the same core values, discover corresponding interests, and find opportunities where they can complement each other in terms of work.
  • Encourage her to take on projects she can’t handle alone. So let her work with partners.
  • Show her that the success comes from her own work, but that the next step is something that requires a different style: collaboration.
  • Describe role models who focus on “we”, triads and group success
  • Tell about your own step from stage 3 to 4
  • Teach her that real power is not in knowledge but in networking. Make it clear that you are on her side.
  • Encourage transparency. Encourage her to tell more than what is absolutely necessary.

From level 4 to 5:

  • Ensure her triads are based on values, benefits and opportunities.
  • Encourage the use of market conditions to make history.
  • If the market doesn’t deliver anything, create an opportunity.
  • Recruit others to the tribe who share the values ​​of the group’s strategy.
  • If the team encounters difficulties, also refer to others for solutions. Do not try to solve everything yourself (that is level 3 behavior).
  • “Change the oil regularly” with the following questions: 1) what is going well, 2) what is not going well and 3) what can the team do about it?

 

Tribal leaders do their work for the good of others, not for themselves, and they are rewarded with loyal employees, hard work, innovation and collaboration. The tribe can complete more difficult assignments in a shorter time with a higher quality of finish.

The Psychology of Cyber Crime – Concepts and Principles

Authors: Grainne Kirwan; Andrew Power

The authors have set themselves the goal of bundling a number of ideas about the psychology of cyber crime. However, this is not easy, especially because it is not so simple to define cyber crime as an overarching container concept. They try to do that in the first chapter of section 1 (Introduction): “Creating the Ground Rules: How can Cybercrime be Defined and Governed?” The term covers a wide variety of thefts, private issues such as disputes between buyers and sellers, and all kinds of anti-social behavior. The definition they work with becomes “any activity occurring online which has intended negative consequences for others”

A first category are crimes that already exist offline, but are now facilitated by the internet. Examples are bank card fraud, theft of information, blackmail, obscenity, money laundering, etc. A second category are new crimes that did not exist before working with networked computers. Examples are hacking, denial of service, distribution of malware, …

A third category comes to mind when computer users start using online Avatars. This can be, for example, the harassing of someone online, which then continues offline.

The government can respond to cybercrime through laws; a response can come from companies with, among other things, a practical code of conduct, a technical response or a user response.

Because the internet is growing in terms of the number of users and the number of hours per user, we can speak of a term such as “cyber citizen”. That means there is a need for a framework of laws, rules and guidelines to keep order online.

The next question is “Can Forensic Psychology Contribute to Solving the Problem of Cybercrime?”. This determines the issue in Chapter 2.

Forensic psychology as a concept is well known to the general public through television series. But they provide a distorted picture. So the first question is “What is Forensic Psychology?”. In this work the broad definition is chosen that states that “forensic psychology is a combination of legal psychology covering the application of psychological knowledge and methods to the process of law and criminological psychology dealing with the application of psychological theory and method to the understanding ( and reduction) of criminal behavior ”. The authors also assume that “it will be considered to include any way by which psychology can be of assistance at any stage in the criminal justice process.”

Tasks in which forensic psychology is involved are the assessment of offenders with regard to psychological disorders, the punishment, rehabilitation and the associated risk assessment. This includes interviewing suspects and analyzing eyewitness accounts. And ultimately also profiling offenders in criminal investigations.

Chapter 3 continues with the question “Can Theories of Crime be Applied to Cybercriminal Acts?”.

After all, theoretical explanations of crimes can help society understand how and why crimes are happening. But it also helps predict future criminal behavior. In addition, the insight provides a basis for successful rehabilitation strategies, as well as preventive strategies. There are different types of theories:

  • Social theories (which views crime on a social level rather than individually),
  • Community theory that states that sometimes crime does not happen randomly in society,
  • Socialization Influence Theories, which state that psychology is important because, for example, it involves observational learning,
  • Individual Theories, which state that certain traits of the person determine the likelihood that he or she will become a criminal, and what type of criminal.

Such theories can then (perhaps) be applied to cyber crime. Important in this are:

  • Social Construction of Crime: some cases are already criminally offline, others are offline in a gray area, but are not socially accepted,
  • Biological Theories of Crime: A comparison is made with the ancient “science” of cranology. There is some evidence that the majority of cyber criminals are men, but there is very little information on how biological theories explain cyber crime. So it’s been noticed somewhat, but we don’t know why it would be true,
  • Learning Theories: A cyber criminal candidate may be put off by fear of punishment, or by guilt when he / she sees the consequences for the victim. Or he / she may induce to commit the crime online, but not to commit it offline, such as cyberbullying.
  • Eysenck’s Theory of crime: he applied conditioning learning theory to crime, and came up with the idea that people with more extroversion, neurotisism, and psychoses are more likely to engage in criminal behavior. This theory is strongly contradicted by his colleagues.
  • Psychoanalytic theories do not appear to be fertile ground for explanations of criminal behavior.
  • Addiction and Arousal Theory: it has been noted that treatment of the addiction often leads to a reduction / cessation of criminal behavior. There are also testimonials from cyber criminals that “they get a thrill” of committing the crime.
  • Neutralization theory: criminals rationalize their guilt feelings with different types of argumentation. There is also some evidence for cyber criminals doing this.
  • Geographic theories are also important in cybercrime: different countries or groups of countries have different laws, different definitions of certain types of crimes. But the ease of access to the means to commit the crime also plays a role. E.g. having a computer, servers, network, internet.

Section 2 deals with Internet-specific crimes.

Section 3 deals with online variations of offline crimes

I summarize a few things about these two sections in this Excel sheet:

Section 4 talks about crimes in virtual worlds.

This is not so much about pure crime over the internet, but about crimes against people, who, among other things, present themselves as avatars. Chapter 12 asks the question “Crime in Virtual Worlds: Should Victims Feel Distressed?” This includes property crime, such as theft of property, but also crimes against persons, such as their avatar, including rape, stalking, etc., which can also continue offline. The question of police action and preventive action is addressed. But there appears to be mainly anecdotal data, not so much a large mass of empirical data.

Finally, Chapter 13 deals with “On-Line Governance”: what is needed in online government, what else is needed, how do political tendencies emerge, and how has “Second Life” been important in the past. But also: is a “Virtual Government” an added value? ”. Or should the government stay away from the Virtual World? E.g. because it is hopeless, or even unwanted?