Risk, the ugly sister

1. Risk, the ugly sister or: how you can try a new approach to the subject and have success in projects ? Workshop at the International Friedberger PM-Forum at 10th of march 2006 run by Dr. Klaus Wagenhals, Development of organizations and leaders, Offenbach

2. Understanding Risk Management • Risk management focuses on the early recognition and management of dangers that could jeopardise the project’s execution or success • Special risks can include: a complex contract, international environment or team • Risks can be assessed differently due to differences in socio-political or economic systems, climate, or religious belief

3. Riskmanagement depends on personality, culture (of the company) and the role in the project behaviour norms/values assumptions the dimensions for Distinguishing national Cultures (Hofstede a.o.) culture personality (Enneagramm) Role in the project Role-taking Role-playing Role-performing

4. Typ 1(Perfektionist) ärgert sich wenn der Projektablauf durch unvorhergesehene Dinge verzögert wird; hat Aversion gegen Risiken – wird alles tun, um sie zu vermeiden Typ 2 (Geber) erkennt und vermeidet Risiken, die Beziehungen gefährden könnten Typ 3 (der Erfolgreiche) nimmt sich wenig Zeit für Details – will „action“; nimmt Risiken in Kauf, wenn ihm keine Nachteile entstehen Typ 4 (Künstler) steht gerne am Abgrund, braucht den Nervenkitzel – blüht auf , wenn sich Risiken auftun; sieht diese als Herausforderung an Typ 5 (Beobachter) versucht Risiken sachlich und nüchtern zu betrachten , zieht alle Einflußfaktoren in betracht, verläßt sich auf seine Logik Typ 6 (TeamPlayer) kann sich alles vorstellen, was überhaupt schief gehen kann und bremst daher die anderen Typ 7 (Optimist) sieht die Situation optimistisch und neigt dazu Risiken zu übersehen oder zu unterschätzen Typ 8 (Boss) neigt dazu keine Furcht zu empfinden, verläßt sich auf seinen Instinkt, hat keine Geduld für detaillierte Analysen Typ 9 (Vermittler) blendet Gefahren unbewußt aus und „übersieht“ damit Risiken Risikoverhalten nach Persönlichkeitstypen

5. Schein’s Levels Of Culture Visible (hard to decipher) Visible organisational structures and processes Language, Rituals, Dress, Behaviors, etc. Norms and espoused values partly visible, partly subconscious (espoused justifications) Strategies, goals, philosophies, taboos invisible, mostly subconscious (ultimate source of values and actions) Basic underlying assumptions Unconscious, taken-for-granted beliefs, perceptions, thoughts and feelings Adapted from E.H. Schein The Corporate Culture Survival Guide (1999)

6. Hofstede´s Dimensions Power Distancemeasures emotional distance between manager and staff. • People from low PD cultures expect to be involved in decision making, defining project targets and organisation, planning. He is treated as being equal. • People from high PD cultures expect the leader to decide, define the project targets and organisation, team guidelines, project planning. In return leaders receive special privileges. Individualistic/collectivisticdescribes from where people derive their identity. • In individualistic cultures identity is anchored in the person. They tend to take care of their own interests and • In collectivistic cultures identity is derived fro membership in a particular “in-group”, e.g. family, clan or company. They exhibit a high degree of loyalty to the group and decisions must always take the group’s interests into account. Uncertainty Avoidance(UA)measures the degree to which people feel threatened by uncertain or unknown situations • Cultures with a high UA seek to avoid uncertainty through the use of (unspoken) rules and structures. • Cultures with a low UA tend to dislike a lot of formal rules. They respond to new challenges with curiosity and value creative and innovative solutions.

7. Main cultural influences on risk management

8. Environment Personality (Role receiver, Role bearer) Organisation Tasks Understanding of the main tasks Habits, Values, Wishes, Abilities Structure Training, Position, Power Culture Values & Norms Position Expectations Status cook Role sender (The Others) Father Where The Role Comes From Friend/ lover Behaviour Quelle: Steiger & Lippmann Handbuch angewandte Psychologie für Führungskräfte Berlin (1999)

9. Risk Statement • Statements are interpreted differently, due to different cultural filters • A good risk statement must • Be clear • Be easy to understand • Contain a condition and a consequence • Since some formulations can cause offence, they should be checked by the risk manager before “release” • Risk assessment should be carried out by the project team to protect against cultural distortion • Depending on power distance, the assessment can be carried out individually or in groups before being aggregated

10. Risiko Statement Bedingung Konsequenz Kriterien für ein gutes Risikostatement: • Es muss eindeutig sein • Es muss leicht verständlich sein • Es muss Bedingung und Konsequenz sowie Wahrscheinlichkeit enthalten

11. Risk-evaluation and activities • evaluation out of the statement (and classification) by projectmanager and/or -team • make a list with priorities and communicate it (attention: be careful with your sentences!) • Planning activities and fixing an appropriate process for controlling (states of escalation included and a plan for urgent situations; important: exact definition of indicators for the overcome of the fixed values)