Risking it all on PERFORMANCES Abstract This article has its genesis in a project management programme I was developing for a physical disability organisation when preparing its project management plan and associated documentation. While engaged with the project management process, it became abundantly clear that in order to succeed, I would have to develop a risk analysis framework. The purpose of this article Is to provide an early attempt at describing a new approach to risk analysis. Background Risk Management - Risk management is the term applied to a logical and systematic method of establishing the context, identifying, analyzing, evaluating, treating, monitoring and communicating risks associated with any activity, function or process in a way that will enable organizations to minimize losses and maximize opportunities. Risk Management is also described as 'all the things you need to do to make the future sufficiently certain'. (The NZ Society for Risk Management, 2001) The goal for risk management in the event industry should be to allow maximum range of activities to be enjoyed in a safe environment. Introduction We strategists enjoy our acronyms, which have become an industry in their own right. For example, we have SWOT, PEST, SLEPT, PESTLE, MOST, SMART and TOWS.These are the main strategic tools for analysing markets, strategies and organisations. Risk analysis has always been a difficult one for me to get my head around, especially as I haven't had any formal training in project management. Consequently, I decided to formulate a risk analysis framework personalised for the disability organisation to aid it in its task. However, I recognised that it might be useful for others, particularly, smaller organisations to use and adapt. What is PERFORMANCES analysis? Simply put ( but not simplistically!) it is a list of key issues arrived at by using the PERFORMANCES framework tool. The tool should be used in conjunction with a SWOT analysis. It might be helpful to consider PERFORMANCES under a number of stages. Stage 1 I began the process with the use of a flip chart, setting out key PERFORMANCES components as below. The central plank (inner circle) is the risk area. The twelve components are Political; Economic; Reputation; Financial; Organisational; Reputation;Management; Administrative; Networking; Cultural; Environmental and Social risks. This can be diagrammatised as follows:
The first component is Political - What are the issues that could impact the organisation? Government legislation and policy? Local government arrangements? Etc. The twelve components represented what I considered were appropriate for the piece of work in which we were engaged. On another day and given the nature of the project, it might look quite different. Next, I took what the framework identified as the major risks and placed them in order. Harmful or helpful Stage 2 Now as a stimulus for further discussion, I teased out additional issues. After, a short brainstorming session, I arrived at a clutch of risks and threats to organisational health and for successfully completing the projects. These further risks were likely to come from cultural, legal, partnership and legislative factors. For example, we identified issues that might arise over the life of the projects. These could be conflict, unequal load sharing, jealousy, power struggles, etc. It was now possible to mitigate them. Without undertaking the PERFORMANCES analysis we might have missed some of the issues the tool served as a prompt We then repeated the process for the rest of the acronyms until we completed the analysis. Finally, we arrived at a comprehensive analysis of our risks; and therefore we will not be taken by surprise. From this, we developed our risk analysis plan. With lists compiled, sorted and grouped, it was necessary for th PERFORMANCES participants to select their five most important items from the list in order to gain a wider view. Clarity of objectives is key to this process, as evaluation and elimination will be necessary to cull the wheat from the chaff. Although some aspects may require further research, a clear picture should , at this stage start to emerge in response to the objectives. In undertaking the analysis, and in hindsight, the following surfaced, and are Be selective in the final evaluation Record all thoughts and ideas at all stages. Be analytical and specific Choose a suitable facilitator to lead the sessions Choose the right people for the excercise The PERFORMANCES technique can help prepare or amend plans in problemsolving and decision making. Hopefully PERFORMANCES will become another weapon in the strategists armoury. Although. Raw and unsophisticated in its embryonic form, with greater use we trust will improve its performance(pun intended). We hope it will help the Strategist, Project Manager, Marketing Manager and Business Analyst, etc.
While there was some debate about which key issues should be chosen, the solution that follows provides a sketch of what a plausible list might look like. I wanted to identify 'a mini-menu' for each key issue and I needed to invest some time to ensure we had a clear and complete understanding of the twelve key areas.The following issues emerged 1. Political 1.1. Scottish Devolution - How will it affect us? 1.2. Government policy - perhaps changes in legislation or charity law. 1.3. Change in government with different agendas 2. Environment 2.1 Environmental policies internal/external 2.2 energy conservation - organisation and wider. 3. Reputation 3.1 What are the project's impacts on the organisation's image? Will they add to it? Will they have a negative impact? 4.
Financial 4.1. Are robust financial systems. policies and procedures in place? 4.2. Is the finances healthy? What impact will the financial downturn have on the organisation?
5.
Organisational Healthy and safe working environment? Equal opportunities? Strong Governance? Mix of skills abilities and talents.
6.
Reputation 6.1 Does the project give the organisation added reputation? What will others think of us?
7.
Management 7.1 strong/weak leadership? Effective/ineffective communications?
8.
Administrative 8.1. Are procedures/policies and procedures in place? 8.2 Do staff fully understand them?
9.
Networking 9.1 Are there healthy and equal working relations with partners? 9.2 Are workloads and responsibilities shared evenly amongst partners?
10.
Culture 10.1 Do we know our organisational culture and how it affects our business? Can the new project act as a stimulus to change any negative aspects?
11.
Economic
Do the money markets impact the organisation? 12.
Social Are local communities involved in our work? If not, should they? What responsibilities do we have do we have to our communities? Acre. We good Stewards of what we have? Is there a corporate responsibility strategy in place?
Having arrived at these risk areas for further debate and discussion based on thses twelve 'key' components, we then moved to stage three of the exercise. Stage 3 With the lists compiled, I encouraged participants to select their five most important items from the list in order to gain a wider view. Clarity of key issues is critical to this process, as evaluation and elimination will be necessary to winnow the chaff from the wheat. Gradually we accrued a wide range of diverse issues In undertaking the analysis, we found it useful to Be selective Record all thoughts and ideas at all stages Be analytical and specific Choose a suitable PERFORMANCES leader or facilitator Select the right for the exercise The risk assessment process highlighted in this article is based on the Australian Standard for Risk Management (AS/NZ ISO 31000;2006) which defines risk as 'the effect of uncertainty on objectives' For their VET Quality Framework, risk relates to the potential impact on the delivery of quality training and assessment services. Then we used the following matrix as a tool for arriving at the risk estimate.It is not a prescriptive solution for deciding on the appropriate risk estimate for any given as verse outcome or on the managemnt conditions to be imposed, although risks estimated as 'high' or 'moderate' will require monitoring and management. Once the risk estimate has been established, the next step is to assess the risks. Risk assessment can be usually considered as a series of questions.What might happen? How might it happen? Will it be serious if it happens? How likely is it to happen? And finally What is the risk? Although, risk assessment most simply presented as a linear process, in reality it is cyclical or iterative, with risk communication actively informing the other elements. For this reason, it is helpful to use terminology that clearly distinguishes between
After going through the process, we had ended up with a satisfactory degree of risk.