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The Risks of Risk Management
This article from Strategic PPM cites the findings of economist Sam Peltzman who found that risk management policies can greatly affect the amount of risks people are willing to take. For example: people who wear seat belts generally drive faster and get in more accidents (fortunately, since they are restrained, they generally fair better in the accidents as well). So how does this apply to your next project? Consider for a moment what risky activities your willing to take on because you have a risk management plan:
So the question for the project manager is are your risk management policies changing behavior? This is not to say you shouldn’t bother with risk management, just as with seat belts the overall benefit is likely to be positive, but pay attention to how behavior is changing as a result of the changes you implement. Are people less cautious knowing there is a more robust monitoring process in place for their projects? Are team members less focused on escalating problems knowing that someone else is watching out for them?
This is not to say that you shouldn’t take any risks at all-but do consider whether you and your team is taking a risk based off of possible reward or simply because there is a net beneath you. By recognizing the difference, you can eliminate or minimize risks that have little to no benefit while making sure your risk management process is used for those risks that are otherwise unavoidable.
May we have the name of the study that supports the comment “. . . people who wear seatbelts generally drive faster. . .” Thanks.
Hello Mark: The article doesn’t mention a particular study. However, it does link to the Wikipedia page that discusses the Peltzman effect: http://en.wikipedia.org/wiki/Peltzman_effect