Fukushima Number One

As reported in my article "Homer Simpson: Man of the Atom" in Trap Door magazine, I once got to run a nuclear reactor — admittedly, a low-power one used only for training students. This hardly makes me an authority on nuclear power, but I do know something about risk management.

Like many of you, I'm following the evolving Fukushima Dai-ichi Nuclear Power Station story with great interest. I'm a pro-nuclear safety conscious environmentalist, if that makes any sense. I think a lot of anti-nuclear sentiment is rooted in emotion rather than analysis, and contains the same anti-science bias that I object to so strongly when practiced by the right wing.

That doesn't make the case for nuclear power a slam dunk by any means. The downsides are obvious and substantial, and the tendency to rely on nuclear power generation to supply plutonium for other purposes has led to what seem to me to be false choices. I'm following with interest the discussion of thorium reactors, and I think the investment we're making in fusion is ridiculously low. That doesn't mean I don't like wind and solar as well. But all forms of power impose risks and costs.

The question in risk management isn't whether a proposed solution has drawbacks (technically known as secondary risks). Most proposed solutions, regardless of the problem under discussion, tend to have secondary risks and consequences.

The three questions about secondary risk that matter are:

1. How acceptable is the secondary risk? The impact and likelihood of secondary risks can vary greatly. Some secondary risks are no big deal. We accept them and move on. Others are far more serious. A secondary risk can indeed turn out to be much greater than the primary risk would have been.
2. How manageable is the secondary risk? A secondary risk, like a primary one, may be quite terrible if you don't do anything about it. The key word, of course, is "if." What can be done to manage or reduce the secondary risk? 
3. How does the secondary risk compare to other options? As I've argued elsewhere, the management difference between "bad" and "worse" is often more important than the difference between good and bad. If the secondary risk of this solution is high, and if you can't do anything meaningful to reduce it, you still have to compare it to your other options, whatever they are.

In the case of nuclear power, the unmitigated secondary risk is unacceptably high. But all that does is demonstrate that the risk needs to be mitigated — reduced to some acceptable level. Ideally, that level is zero, but that may not be possible, and it may not be cost-effective to reduce it beyond a certain point. The leftover risk, whatever it is, is known as residual risk. Residual risk is what we need to worry about. Like with secondary risk, the three questions of acceptability, manageability, and comparison help us judge the importance of the residual risk.

We make one set of risk decisions at the outset of the project. We decide which projects we want to do; we decide what overall direction and strategy we will follow; and we decide what resources to supply. All the decision are informed by how people perceive the risk choices.

As the project evolves, the risk profile changes. Some things we worry about turn out to be non-issues, and other times we are blindsided with nasty surprises. Our initial risk decisions are seldom completely on target, so they must evolve over time.

When disaster strikes, suspicion automatically and naturally falls on the risk planning process. Were project owners and leaders prudent? Armed with the howitzer of 20-20 hindsight, the fact of what did happen carries a presumption of incompetent planning for those who failed to anticipate it. Sometimes it's a fair judgment. Other times not so much.

I'm still working out what I think about the Fukushima case, but some initial indications strike me as positive when it comes to evaluating the quality of the risk planning. The basic water-cooled design of Fukushima made a Chernobyl outcome impossible. The partial meltdown didn't rupture the containment vessel, and although the cleanup will be messy and expensive, it's not likely to spread outside the immediate area.

The effects of radiation may not be known for some time, but even those have to be put into perspective. Non-nuclear power plants, however, cost lives too, even though you don't hear about these disasters as often. A quick Google search turned up the following:

• September 2010: Burnsville, Minnesota, explosion, no deaths.
• February 2010: Connecticut, 5 dead
• February 2009: Milwaukee, 6 burned
• June 2009: Mississauga, Ontario

And, of course, several thousand people a year die mining coal.

Schrödinger's Cat Walked Into a Bar — And Didn't

The famous story of the boxed cat who is simultaneously dead and alive was first proposed as a thought experiment by Austrian physicist Erwin Schrödinger in 1935. The cat came to quasi-life as part of an argument between Schrödinger and Albert Einstein concerning elements of the Copenhagen interpretation of quantum mechanics.

No cats, of course, were actually injured in the making of this theory.

In his 1935 article, Schrödinger wrote:

"One can even set up quite ridiculous cases. A cat is penned up in a steel chamber, along with the following device (which must be secured against direct interference by the cat): in a Geiger counter, there is a tiny bit of radioactive substance, so small that perhaps in the course of the hour, one of the atoms decays, but also, with equal probability, perhaps none; if it happens, the counter tube discharges, and through a relay releases a hammer that shatters a small flask of hydrocyanic acid. If one has left this entire system to itself for an hour, one would say that the cat still lives if meanwhile no atom has decayed. The psi-function of the entire system would express this by having in it the living and dead cat (pardon the expression) mixed or smeared out in equal parts."

“Ridiculous” is the tip-off. Schrödinger didn’t want us to take the cat — or the argument — seriously. But if you move from the realm of quantum mechanics to the realm of our macro reality, Schrödinger's Cat is far from ridiculous: it’s our everyday experience.

Imagine a call comes in from Cat Rescue HQ. That Schrödinger boy is at it again, locking yet another innocent kitty inside that infernal device. As you load up the van, what do you bring? Well, that depends on the state of the cat. So you bring some food and medicine, or a cat carrier — but just in case, you need to pack a pet-size body bag and some disposable gloves.

Operationally, you treat the cat as alive and dead up until the moment the sad (or happy) truth is revealed.

That’s risk management. You have to plan and prepare for a range of outcomes, treating each as in some sense real until the state collapses and time’s final verdict is rendered. It’s seldom wise to believe in a single deterministic future.

Four Dimensions of Risk

As a science fiction reader and alternate history writer, I’ve always lived in the future to some extent. From our time-bound perspective, the future is a wave front of uncertainty. Many things are possible, but ultimately only some things will happen.

Today, we have to make decisions about the future, and those decisions necessarily have to be made under conditions uncertainty. That’s the domain of risk, the place where philosophy and statistics meet. Yesterday, I sent in the manuscript for my 24th book, Project Risk and Cost Analysis, for AMACOM’s self-study sourcebook line. It’s been a fascinating project.

Risk is future tense, as opposed to problem, which is present tense. Risks are events that have not yet happened. The events can be good for us, or bad for us. They can have great impact, or little impact. They are more likely or less likely.

The risk environment changes over time. For example, there’s a lot of noise on the issue of climate change. Opponents argue that the science cannot say with certainty that the feared effects of climate change will happen. From a risk management perspective, that’s true, but it’s also completely irrelevant. Hardly anything in the future is really 100 percent (or, for that matter, zero percent) sure to happen. The measurement of a risk today is our estimate of its probability times our estimate of its impact if it happens (usually written R = P x I).

As time moves forward, our knowledge will change. Our estimate of the probability will increase or decrease. Our estimate of the potential impact will be refined. (Estimates of impact, by the way, tend to be more precise and have more agreement than estimates of probability. In the case of climate change, both sides agree on the claimed impact; what they disagree on is the likelihood of that impact occurring.)

And, by somewhere around the year 2050, the argument will eventually go away completely. By then, it will be incontrovertibly clear what has happened. One or both sides will be proved wrong. Uncertainty will collapse; Schrödinger’s cat will be out of the box, alive or dead.

As we move through the life cycle of a project, our vision changes. All risks on a project eventually go away, either by becoming true (problem or good fortune), or by becoming false (no harm, no foul). At the same time, new risks swim into view as we navigate forward through the rocky stream of time.

The uncertainty of the future inevitably becomes the fact of the present.

Risk can be thought of in four dimensions:

1. Goodness/Badness. In practice, risk is often used a synonym of threat. But events can be beneficial or harmful, or a mixture. Sometimes you can choose.
2. Impact. You can find a dollar bill on the sidewalk, or you can find a hundred dollar bill. Both qualify as opportunity. You can lose a dollar, or you can lose a hundred dollars. Both qualify as threats. The difference, in both cases, is impact.
3. Probability. Most people carry a lot more ones than hundreds, and are more likely to miss and search for a lost hundred. There’s a greater chance of finding (or losing) the smaller amount.
4. Time. What we knew yesterday is different from what we know today or will know tomorrow. The risks that should concern us, and the choices we can make, do not remain static.
5. Remediation. What, if anything, can you do about it? What will it cost? The value of a risk all by itself doesn’t tell us much. Only when you compare the value of the risk with the cost of the risk response do you know the shape of the decision space

In thinking about risk, put the risk into context — what’s it’s effect on you and others, and what’s the relative cost of the solution compared to the (risk-based) cost of the problem?

Why Bother? (Some Thoughts on Goal-Setting)

When people find out I’ve written a number of books, the first response is often, “Gee, I’ve always wanted to write a book.”

My first question is always the same, “Why?”

People are often puzzled at the question, but it’s the most important question of all in setting and achieving your goals. You aren’t chasing this goal for the fun of it, but because you believe achieving the goal will satisfy some need, solve some problem, or provide some benefit. If you can’t clearly explain why you want to achieve the goal, there’s a good chance you may head off in the wrong direction.

Let’s apply the question to this particular goal: Why would someone want to write a book? Well, there are many possible reasons. Here are some of the more common.

a) You want to make as much money as J. K. (Harry Potter) Rowling
b) You want to appear on Oprah and be famous
c) You want to impress people with your talent
d) You have something really important you want to share with the world
e) It’s your art
f) It’s your therapy

If your real goal is money, there are lots more reliable ways of getting it than by writing books. Yes, a few writers make an awful lot of money, but the vast majority of published authors make little or nothing. One writer I know devoted several years to writing a novel he knew would make a lot of money. He did well: the Book of the Month Club, foreign translations, and even sold the movie rights. But he wasn’t satisfied. He expected to make millions. So he gave up. If you want to succeed at a goal, you need to understand why you want it. This is critical.

You have to do this process for any goal you set for yourself. Why do you want it? How does this goal relate to your other goals? What will be different for you when you succeed? Are there better ways to get there? What elements of the goal are most valuable and most important to you?

What you have to supply is the quality of your self-understanding. If you understand “why,” maybe you’ll pursue the same goal, or maybe you’ll change to a goal that actually relates more closely to what you hope to gain.

Knowing “why” gives you strength and power. If your goals are challenging (and they should be), achieving them takes hard work and risk. If the goal isn’t really important to you, or if you’ve picked a goal that won’t really satisfy the “why,” it’s awfully difficult to maintain the self-discipline to get the job done.

A case in point: My best friend in college used to publish an amateur mimeographed magazine. One of his (unpaid) columnists was this Pennsylvania schoolteacher who later sold a novel, quit his job, and let his wife support him. He was a good example of what not to do, or so I thought. For years, every time my friend and I got together and talked about old times, sooner or later one of us would ask, “What do you suppose ever happened to Dean Koontz?”

You probably already know how this story turns out. Dean Koontz has managed the rare feat of having ten New York Times #1 bestsellers, and is still going strong. (His wife, I’ve read, still works: she manages their business.) He knew what he wanted and why he wanted it, and so he was able to persist in the face of skepticism and rejection.

My friend Humayun Mirza is probably the most successful author I know, though it's unlikely you've heard of him. He wrote From Plassey to Pakistan. It's a history of his father, Iskander Mirza, first president of Pakistan, and his ancestors, the Mughal rulers of Bengal, Bihar, and Orissa. He didn't make a lot of money from his book, but through impeccable research managed to set the historical record straight on several important points. He was successful because he succeeded in doing what he set out to do. Different goals = different success metrics.

Always ask “Why?” The more reasons you have to pursue a goal, the better you’ll likely do in terms of achieving it. I write because I have a perspective on people and organizations I want to share. But writing’s not the only way to do that; I also teach seminars. I like the act of writing; I like seeing my books in bookstores.

Why do you want to achieve your goals? The answer to that question has power. It’s what motivates you. It’s what shows you the right path to take. And it’s what opens the doors that lead to your success.




Adapted from Goal Setting: How to Create an Action Plan and Achieve Your Goals (WorkSmart series, second edition), by Susan B. Wilson and Michael S. Dobson. Copyright © 2008 AMACOM. All rights reserved. Used with permission.

The POWER Model

When I first became a supervisor, I was so naïve I actually thought that meant people would do what I said. It's even worse when you're a project manager, and the people you need don't even work for you.

The discipline of influence management, which is a practical and completely legitimate form of office politics, is another of the core competencies of good project managers.

Influence management is, as the name suggests, the art and craft of gaining influence over others, which requires power. There are six sources of organizational power that reinforce one another to give you expanded influence to get the work done:

ROLE Power

Your official role in the organization, along with special delegated assignments, committee and staff positions, etc., gives you certain influence. Even those who do not report to you in a formal sense normally have to show at least a minimum respect for your organizational role. Notice that this power is given to you by others, and is capable of being countermanded.

RESPECT Power

A powerful source of influence management is the respect others have for you, because of your track record, your special knowledge, your insight and intelligence, and your personal integrity and honesty. While respect power takes time to build, it’s often much more powerful than organizational role in influencing the behavior of others.

RHETORIC Power

Skill in the arts of communication is a source of influence and power. A clearly written memo setting forth goals, roles, expectations, and time requirements for a specific task is harder to ignore than a badly written and confusing one. Your personal ability to negotiate, to sell, and sometimes even to plead are ways to influence others to get the work done.

RESOURCES Power

You often have control of certain resources—your own time and priority list, if nothing else—that others require to get their work done. While it’s in the long run ineffective to try to deny others to blackmail them into cooperating with you, it’s legitimate to go the extra mile for those who are willing to go the extra mile for you in return.

RELATIONSHIP Power

Who you know and what kind of relationship you have with them is another traditional source of power. Some people interpret this too narrowly, and only suck up. But notice the power held by someone who has a staff-level friend in every department. Good manners and a friendly smile are effective influence management tools available to anyone.

REASON Power

Depending on the priority of your project, you may get additional power from it. Reason power comes from the “Why?” of your project. Under normal circumstances, you couldn’t evict a vice president from his or her office, but if you’re the acting fire marshal and there’s a fire, your reason for giving orders is so high that everyone will tend to obey you. Faking a higher level of priority for your project is normally a bad idea, but when your project has significant priority and legitimacy, it’s completely appropriate to use that power in support of accomplishing your ends.

Adapted from Gameplan for Getting Results with Project Management, by Michael S. Dobson, PMP. Copyright © 2010 Michael S. Dobson. All Rights Reserved. Used with permission.

Triage for Project Managers (Part Two)

Our triage process has identified the most difficult and challenging projects, and now it’s time to perform a “deep dive” analysis of project difficulty — the final step in our preliminary analysis. The goal is to make sure we have a deeper understanding of the issues. Our earlier question, “What is the minimum decision and minimum action I must take right now?” is one that we must repeat as we move forward in the project.

Unless you’re staring at an Apollo 13-style deadline, with the clock ticking as CO2 levels rise, the right thing, as innumerable after-school specials have taught us, is to Learn More About It.

Difficulty comes in three dimensions: more complexity, tighter constraints, and less certainty. Of course, a project can have difficulty in more than one dimension, and their various combinations produce even more issues.

Complexity

Complexity can exist in both product and project. Project complexity is measured by such factors as the number of work packages, the number of resources, and the number of interactions and linkages. Product complexity is measured by such factors as the number of components, the number of processes, and the number of production steps. The key word here is numbers. Complexity can be counted.

Tools for managing complexity abound. They’re found in classical project management, systems engineering, logistics management, and financial risk management. A good background in probability is useful.

Constraints

Constraints come in many flavors, not merely the Neapolitan mélange of time, cost, and performance. You must obey applicable legislation, ethical codes, regulations, internal policies and procedures, and the laws of physics. They aren’t all created equal, especially in terms of their impact on an individual project.

A constraint is only a constraint if it limits your project performance choices.  If a regulation, for example, keeps you from doing something you’d otherwise do, it’s a constraint. If breaking the regulation would not help you achieve your project goal, it’s not a constraint, but merely a fact. (We’re not advocating breaking the regulation, of course, but merely classifying it in terms of your project universe.)

Constraints, as we noted, can be tight or loose, flexible or inflexible. A tight, inflexible constraint can make a project extremely difficult or even impossible. A constraint that is equally tight, but has flexibility, is much less serious. Equally, a loose constraint, even if inflexible, still gives you room to maneuver.

There are three fundamental strategies for managing constraints: change them, check assumptions, and come up with creative workarounds.

Uncertainty

How firm is the ground on which your project sits? Some of the factors that govern project uncertainty include the stability and likelihood of identified assumptions, the stability of your stakeholder community, the state of competition, the extent of newness, and the level of risk.

The difficulty in measuring uncertainty is the extent of the “unknown unknown” universe, the extent to which we don’t even know what it is we don’t know. In the managing assumptions, an equal problem comes in the form of “unknown knowns,” things that we don’t know that we actually do know.

Complex and Tightly Constrained

When complexity meets tight constraints, the value of the formal tools (project management, systems engineering, logistics management) tends to increase, because driving waste out of the system and driving structural efficiency into the system reduces constraint pressure. Formal systems also provide the necessary data structure to back up negotiations to modify constraints as well as to support creative efforts to move past them.

Complex and Uncertain

Uncertainty, on the other hand, undercuts and weakens the tools needed to manage complexity. Formal systems naturally work less well when the necessary data is unavailable or unreliable. The two main tools to manage complexity and uncertainty are risk management to prepare for known possible risks, and contingency reserves (extra time, extra money, optional requirements) to prepare for unknowns.

Watch out as well for uncertainty caused by complex stakeholder interactions and political maneuvering. The trouble-plagued Denver International Airport (DIA) construction project, delivered in 1994 after a $2 billion cost overrun and a year’s delay, was victimized by a constant tug-of-war among stakeholders ranging from city officials to airlines to various business interests.

Cognitive biases interfere here as well. Not only does weak data increase the role of bias in decision-making, uncertainty can also manifest itself in the form of various biases, especially denial.

Tightly Constrained and Uncertain

While tightly constrained and highly uncertain projects may not be impossible, they are often problematic. It may be legitimate to review whether the project should be attempted in the first place. If you go ahead with the project, failure is a significant risk, so plan for damage control in case of catastrophe.

Negotiating changes in the constraints is usually a worthwhile strategy, but the real problem is that projects in this category are often crisis responses. There were plenty of CO2 filters available for the Apollo 13 lunar module; the problem is that they were on Earth. Management freely gave project teams every resource possible — the problem is, that the range of the possible was very narrow indeed.

Complex, Tightly Constrained, Highly Uncertain

The trifecta of project management comes when a project scores high in each of the three dimensions. In 1991, as the Iraqi military retreated from Kuwait, they set fire to 737 oil wells after placing land mines to keep out firefighting crews. The resultant project to put out those fires fit all of our criteria. While money was available in ample amounts, professionals with the unique skills to handle a problem such as this are in short supply.

The time constraint didn’t have a specific date attached to it, but the environmental damage was such that time pressure was enormous. Risk and uncertainty were extremely high. Commentators at the time speculated that it might not even be possible to extinguish the fires in anything less than years. The dimensions of the problem were not clear at the outset.

Maintain an extreme vigil over your risk portfolio. Spend resources on information. Move forward in small steps, and watch for indications that your assumptions need to be modified.


[Part 1 appeared last week.]

Adapted from Creative Project Management: Innovative Project Options to Solve Problems On Time and Under Budget, by Michael Dobson and Ted Leemann; published by McGraw-Hill and copyright © 2010 by The McGraw-Hill Companies; all rights reserved. Used with permission.

Triage for Project Managers

The Very Model of a Modern Surgeon-General

In the opening credits for the TV series M*A*S*H, helicopters swoop in low over the hills carrying their precious cargo of gravely wounded soldiers.  Hawkeye Pierce, surgeon-saint in a Hawaiian shirt, leans over one soldier, a serious expression on his face. He quickly assesses the soldier’s condition, signals a waiting nurse, and soon a line of stretchers is carrying the wounded down Helicopter Hill and into surgery.

If you’ve ever waited in a hospital emergency room, you know what triage is. As its pronunciation suggests, triage is a French word, deriving from trier, to sort or select. It’s a formal way to prioritize medical patients based on the severity of their condition.

Both M*A*S*H and triage have their origin in the work of the same man: Baron Dominique-Jean Larrey, MD, surgeon-in-chief to Napoleon’s armies. Napoleon described Larrey as “the worthiest man I ever met,” and there’s some justice to the categorization. He invented the ambulance (inspired by watching Napoleon’s famous “flying artillery” maneuver around the battlefield), and was a pioneer in the enormously complex logistics for providing care in mass-casualty settings. 

Along with other pioneers such as Florence Nightingale and Major Jonathon Letterman, medical director of the Army of the Potomac under General McClellan, Larrey helped transform the face of military medicine, and as a side note changed the way people think about how to utilize limited resources effectively.

Modern medicine is of surprisingly recent vintage. Even the basic idea of the germ theory of disease (see Semmelweis in the cloud tag to your right) only originated in the first half of the 19th century. Medical care for soldiers was appallingly primitive, and throughout all the wars of history far more soldiers died from disease than from combat. It was not until World War II that a combination of more terrible weapons and greatly improved medical care tipped the balance in the other direction.

Military medicine doesn’t just involve the treatment of wounds. To handle mass battlefield casualties requires an enormously complex logistical and administrative apparatus. It’s not enough to be a good doctor; you also have to be a good project manager.

That’s why the concept of triage is so powerful. There is nothing new about the concept of prioritizing, of course. People have sorted, selected, and chosen for as long as there have been choices to make. But priorities are frequently established by a “best guess” method, rather than through a real and meaningful assessment process. An assessment methodology distinguishes real triage from simple prioritizing.

The Hierarchy of Triage

You don’t need to do triage of any sort if you have a single patient (or project), or if there are plenty of resources to go around to accomplish all the work. But that’s seldom the case. You need to perform triage from two different perspectives: not only for the project or projects for which you are responsible, but also so that you understand your relationship to the projects that may potentially compete for the same resources. Both relative and absolute importance have implications for what you do and how you do it Sometimes, your job is to assert the right of way for your projects; other times the right organizational choice is to yield to others.

Initially, you want to make the minimum necessary decision so you can take the minimum necessary action required right now. (You can always do more later.)

Degree of triage required ranges from basic to advanced depending on what’s at stake and what the issues are. Start with the basic process level, and continue as far along the journey as necessary until not only the current project, but also all the projects in your environment, have been accounted for.

Basic Triage

The first stage of medical triage for mass casualties is to separate the victims into three categories:

1.         Those who are likely to live, regardless of what care they receive

2.         Those who are likely to die, regardless of what care they receive

3.         Those for whom immediate care might make a positive difference in outcome.

In project management, Category 1 projects can be identified by large degrees of freedom in the triple constraints of time, performance, and cost. If the schedule is very flexible, performance requirements are modest, and the budget not at issue, there’s not a lot of project management challenge. We often describe smaller Category 1 projects as “tasks. The difference between a task and a project is, after all, merely perspective. Both have the same fundamental characteristics of “temporary and unique.”

Category 2 projects fall are "operationally impossible," meaning they can't be done under the current conditions and constraints. That's not the same thing as saying they're absolutely impossible, of course. Sometimes, current conditions and constraints can change.

Placing a project in Category 2 isn’t something to take lightly. Signs that a project may be in this category include: over-constrained in terms of budget or time, sky-high performance requirements, and high levels of uncontrollable risk. In such cases, you may abandon the project altogether, or perhaps do the very minimum exploratory activities to confirm your analysis. Of course, you may not be the only person whose opinion counts. If you think it’s a Category 2 project but the boss disagrees, you may have to do it anyway — but it's wise to think about self-protection when things go south.

Each triage determination requires an assessment of the specific current situation. Advances in medicine mean that injuries that once were solidly in Category 2 now enjoy remarkable recovery rates.  Similarly, projects once thought impossible also must be reviewed in light of new technologies and circumstances. Relying on outdated paradigms will result in misclassification with corresponding catastrophic results. While miracles are possible, the best doctors and project managers can do is make an informed situational decision using the most current information and technology to achieve the best result.

Category 3 projects need additional analysis, but they also need action. It is in this category that most projects fall.

[Continued next week]

Adapted from Creative Project Management: Innovative Project Options to Solve Problems On Time and Under Budget, by Michael Dobson and Ted Leemann; published by McGraw-Hill and copyright © 2010 by The McGraw-Hill Companies; all rights reserved. Used with permission.