This just happened. The project manager of a very crucial project just quit. If the hard target end date is not met, the company is going have losses in thousands of dollars. But the quitting couldn’t be stopped, since it was due to certain personal reasons. Even though a person was identified within a very short span of time, which in itself was a fantastic achievement, but how much knowledge can one transfer in just 2 days! The mark on the quality of the project execution will remain unless some magic makes it go away.
And so happens in many a projects. From where I am looking, this is the second instance of same thing in under 2 months. In the last year, more than 5. And I’m sure you’ll see it everywhere – in every organisation.
How to handle this? How to factor in such a dangerous risk into a project plan? Yes, one can write it down in a risk log. But can this be quantified? Can we asses the $ loss if this happens or can we assess the $ investment to make sure the risk is negligible?
Sometimes the $ loss can be measured retrospectively (I will discuss the factors contributing to this calculation later) – and naturally a lot of subjective measurement and qualitative aspects will be there in these calculations, which will bring down the accuracy. But whatever be the case, a measurement done in retrospect is of little use to the project concerned. It suffers the impacts anyway.
The problem is if we cannot measure it up front or at least when the incident happened, we cannot take measures to prevent the catastrophe. A measurement up front is the best – because it allows the project manager to put in adequate measures to make sure in case of the event nothing changes in the execution. That’s where the “$ investment” comes in, making the human risk acceptable/negligible. On the other hand, a measurement upon occurance can help in predicting the impact on the end result up front, and hence it can set the right expectations to the customer/sponsor of the project, and whatever needs to be invested to minimise the impact is then known to the sponsor.
Here I won’t attempt to derive a numerical calculation for this. I am sure researchers on management studies have done this already – just that I may not be aware of the same. What generally surprised me was lack of presence of this thought in popular management literature – including PMP® body of knowledge book. Everywhere the risk management for a given project starts as a task for the project manager – but my question is, what happens if the presence of the project manager itself is unstable? Who takes care of that risk? Who measures and manages that risk for a given project? Is it likely that the Project Manager himself writes down a risk like “I may quit in the middle of the project” in his risk log and shares the same with the project sponsors? The answer is not very easy to find at least within the popular management literature. To my view, the calculation of this risk will involve factors like:
Delay in finding a replacement project manager – and idle time cost for this delay
Recruitment cost, remunaration difference, any penulty sum from incumbent person
Extension of overall project timelines and running resource costs
Any cost of quality that has resulted from loss of knowledge during transition and rework pertaining to the same
Any increment in running maintenance cost, resulting from the above root cause
We all know that there are mainly 3 factors that one is concerned with for a project – cost, timeline, and quality. Even though each of these things are closely inter-related… and bottomline is cost anyway, but still we do measure all of these separately for some strange reason (probably immediate controllership). We look at the impact of the “quitting” event from each of these viewpoints to get a way to grab the thing in a more manageable fashion. The calculation will definitely involve the above listed factors, and perhaps many more, but it will generally be more on an approximation calculation (i.e., more qualitative) rather than precise (i.e., quantitative), since almost all these factors – cost elements – always have multiple root causes and multiple cost centres where those will be apportioned to.
To conclude, the risk at the highest level for a project entity is the risk on the project management’s stability and integrity. This is a less-explored area in the popular project management literature, but it impacts the project significantly. We can get some idea of formulating a measurement system for this risk easily by looking at some of the factors listed above, but a more detailed study is required (if that is not done already), and the importance of this needs to be perceived by organisations more intently.
Till I have more thoughts on this matter to share with you all, take care and keep managing your risks.