Project risks – Black Swans or Brown Cygnets?
In my last post I suggested using project management as a potential way to manage unknown unknowns that were external to an organisation such as Covid 19. That was the suggestion for black swans that affect the whole organisation, but what about project specific black swans?
The reality is that unknown unknowns within a project are quite rare. Far more regular are risks that could have been but were not identified. How many times have you had an issue during implementation that on reflection was foreseeable? It was just that the risk management process did not pick it up. (To continue with the swan analogy, maybe we should call these brown cygnets (unknown knowns) that, with time, become white swans (known unknowns)!)
The reality is if you have a good risk management system that starts with a workshop of diverse stakeholders then the likelihood of black swans is small. Ongoing good risk management during planning will ensure that at least 80+% of the risks on a project are identified before implementation starts (contract award in the diagram above). This is not based on research but 25+ years of practical results. With projects of a similar nature then the figure can approach 90%. With different procurement processes the figure can be above ie 90+%.
What do we do about the remaining 5-10%? Well they can only be managed as they arise. But a good risk management system will at least ensure we are not reactive managing 20+% of brown cygnets during implementation.