PMINJ International Project Management Day November 1, 2018 · 2019-02-26 · International Project...

© 2010-17 David Hillson/The Risk Doctor Partnership 1Nov 1, 2018

PMINJ

International Project Management Day

November 1, 2018

Risk-based innovation

Dr David Hillson, The Risk Doctor

PMI Fellow, PMP, HonFAPM, CFIRM

www.risk-doctor.com


Risk-based Innovation


Three key questions

What is risk?

What is innovation?

What is risk-based innovation?


Risk = Uncertainty

True or False ?

Risk = Uncertainty that matters

What is risk?

≠


Two-dimensional:

1. uncertainty

2. effect on objectives

“impact”

“probability”

What is risk?


The impact dimension

What kind of impact matters?

Positive as well as negative

Opportunities as well as threats


What is risk?

“An uncertain event or condition that, if it occurs, has a effect on

an objective”

PMBoK® Guide, Chapter 11

Risk connects uncertainty with objectives

Risk includes both opportunities & threats

positive or negative


What is innovation?

Drucker: “Innovation is the instrument of entrepreneurs.”

Levitt: “Creativity means thinking up new things. Innovation means doing them.”

Anon: “Innovation is what happens when all else fails.”

IDEA

CREATIVITY

NEED

INNOVATION


What is innovation?


A complex blend of both success & failure

Heathrow Terminal 5

3M Post-It sticky notes

Sydney Opera House

What is innovation?


The Innovation Ecocycle

POSITIVE

NEGATIVE

[David Hurst, 1995]



POSITIVE

NEGATIVE



Alternates between innovation & development

Changing focus:Support innovation – maximise time in +ve loop

Speed return to innovation – minimise time in –ve loop

POSITIVE

NEGATIVE

Need a process to support both loops


Risk management addresses

both threats & opportunitiesin a single integrated process

Can risk management support innovation?

“The systematic process of identifying, analysing and responding to risk. It includes

maximising … positive events andminimising … adverse events.”

PMBoK® Guide, Chapter 11



Implementation

and review

Initiation /

Establish context

Risk

identification

Qualitative risk

assessment

Quantitative risk

analysis

Risk response

planning

FINDING OPPORTUNITIES

PICKING WINNERS

MAKING IT HAPPEN NOT ONLY

FOR THREATS


1. FINDING OPPORTUNITIES:What are they?

Opportunity is positive risk

Not a benefit“Opportunity to succeed”

Not a response“Opportunity to act”

Not scope creep“Opportunity to do something else”


Finding opportunities

Opportunities & threats are the same

“Uncertainty that matters”

Differ in sign of impact

Opportunities positive, threats negative

Use same techniques to identify?


Problems with common techniques

Threat-focused

Habit

Familiarity

Technique limitations

Use “two-dimensional techniques”


Example 2D risk identification techniques

Fault/Benefit Tree Analysis

“Yes, but how…?”

Outcomes, Drivers, Uncertainties

WS

O T

SWOT AnalysisStructured brainstorm + and –

S O

W T


VHI

HI

MED

LO

VLO

POSITIVE IMPACT

(Opportunities)

VHI HI MED LO VLO

PR

OB

AB

ILIT

Y

NEGATIVE IMPACT

(Threats)

VHI

HI

MED

LO

VLO

VLO LO MED HI VHI

PR

OB

AB

ILIT

Y

2. PICKING WINNERS:Prioritising opportunities

1

QUICK WINS:EASY TO GET &BIG BENEFIT

3

CONSIDER IMPROVING:EASY BUT

LOWER BENEFIT

2

WORTH EXPLORING:HARDER TO GET

BUT BIG BENEFIT

4

DON’TBOTHER!


Avoid

Reduce

Transfer

Accept

THREAT GENERIC STRATEGY OPPORTUNITY

ELIMINATE UNCERTAINTY

CHANGE SIZE

INVOLVE OTHERS

TAKE THE RISK

Exploit

Enhance

Share

Accept

3. MAKING IT HAPPEN:Responding to opportunities


Final thoughts


Innovation projects

Innovation projects follow Innovation Ecocycle

+ve loop: Innovate, Consolidate, Explore, [Barrier]

–ve loop: Reflect, Learn, Persist, [Breakthrough]

POSITIVE

NEGATIVE

Successful innovation projects must:

Maximise time in +ve loop

Minimise time in –ve loop


Risk management

Risk management is forward-looking radar

… find potential solutions

“Help things go right”

… prevent potential problems

“Stop things going wrong”



Risk management helps innovation projects

Find innovation opportunities

Pick innovation winners

Make innovation happen

[as well as minimising innovation threats!]


Thank youAny questions?


For further information

Dr David HillsonThe Risk Doctor Partnership

+44(0)7717.665222

[email protected]

www.risk-doctor.com

YouTube.com/RiskDoctorVideo

PMINJ International Project Management Day November 1, 2018 · 2019-02-26 · International Project...

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