Dealing with Risk and Uncertainty 147As you list potential problems that threaten your project,
don’t lose sight of the concept of uncertainty. Remember that
the lack of information, knowledge, and understanding is really
your enemy. In other words, think of your biggest “threats” as
those that have the greatest potential to throw you off course
the furthest—in an unfavorable direction.
Quantifying How Badly You Can Get Hurt
OK, so you’ve listed a number of things that could go wrong.
But how “big” is the threat that they pose? You need to quantify
the magnitude of what you’re up against. You’ll need to spend
some time gathering insight on the potential problems you’ve
identified in Step1. This will take some time and judgment,
which is why you limit the list of potential problems. There are
two basic characteristics you’ll want to quantify:
Nature or Extent of the Problem.Let’s say that a labor strike
is possible. Who would be involved? Just a single work group?
The entire plant? When would it happen? Next month? Six
months from now?
Nature or Extent of the Effect. Let’s say that the same strike
could cause “a schedule delay.” How much of a delay? A week?
Two weeks? A month? Will the project necessarily be delayed
by that same amount?
When gathering insight on the nature and extent of problems
and their effects, you’ll have to rely on several sources, includ-
ing the following:
- Survey data (preference, opinion, etc.)
- Historical data
- Product specification sheets
- Mockup, simulation, or testing
- Subject matter expert (SME) judgment
Analyzing the Biggest Threats to Your Project
At this point, you and your team have identified a substantial
list of potential problems. You’ve tried to quantify the extent of