A farmer must move a chicken, fox and wheat across a
river. Why this farmer has a fox is
unimportant, but the fox belongs to the farmer so he must move it across the
river. The farmer has a raft that can
take him across the river, but there is only room for him and one object. The chicken will eat the wheat, if
unsupervised. The fox will eat the
chicken, if unsupervised. The raft has
no propulsion device other than the farmer and the farmer has no rope. What is
the farmer to do? This riddle explains
risk management well. If you aren’t
thinking about the risks involved in your project, then you are likely to lose
your chicken because you left it with the fox.
The riddle also shows that the
risk management plan, isn’t something separate from the project plan, but an
integral part. The risk management plan
is defined a plan that documents the procedures for managing risk throughout a
project. Risk is defined as an uncertainty that can
have a negative or positive effect on meeting project documents. Let’s go back to the farmer. Without analyzing the risk, the farmer goes
ahead and crosses the river with the fox only to come back and find the wheat
was eaten by the chicken. At least, the
farmer had a short project with which to deal, albeit the project was a
failure.
Let’s say instead the farmer took a project management class
and when through the six steps of risk management. Hopefully before leaving for the river, he
would have planned, identified risks, performed qualitative risk analysis, performed
quantitative risk analysis, planned risk responses, and monitored and
controlled. This allowed him to identify
the risks of the fox eating the chicken, the chicken eating the wheat, and the
problems of crossing the river. It is
clear the project objectives can not be completed without planning for these
risks. These risks should be an integral
part of the plan. The farmer performs qualitative
and quantitative risk analysis. In the
qualitative sense, losing any of the three items is horrible for the
farmer. No cost can be associated with
the fox, so the value of the fox is purely qualitative. The farmer just likes the fox that much. In the quantitative sense, the wheat and the
chicken cost $50 and $20 respectively.
The loss of these items hit the farmer in the wallet. The farmer can respond to these risks in four
ways, avoidance, acceptance, transference, and mitigation. Clearly, he can not accept the risk since the consequences are too great. He transfer the risk by hiring a moving
company, but this is too expensive. He
could mitigate the risk by never leaving the fox alone with the chicken or the
chicken alone with the wheat. This seems
to be a good idea. However if the farmer
was smart, he included risk management in his initial planning versus
considering it separately. He then
avoided the risk by not taking the river route or bringing his friend Bob to
help him move the items. Either way, the risk is controlled before reaching the river.
While risks can not always be avoided, all risks are easier
to control when they are identified early in the planning process. Too many people see risk management as a
Cover Your Avenues (CYA) asset that is done after planning. This is the wrong way to approach risk, risk
should be the plan.
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