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Manage Risk like a Formula One Driver

A synergy happens when someone spends large amounts of time thinking about any two things, and it usually produces some uniquely contrived insights. That is what happened to Conrad Morlan, a PMP and PgMP writing for the Voices on Project Management blog. In the case of Morlan, a love of F1 (Formula One) racing fused with project management to produce the following:

As with race car drivers, project managers face risk with different levels of severity. A project manager's risk tolerance level depends on different factors: organizational culture, national culture and experience. It's not only imperative that we provide early identification and assessment of risks — the point is to know and stick to a risk threshold. We may face hardship for accepting the risk and not being successful, but we need to learn the lesson and move on.

Risk Thresholds

The adherence to a risk threshold gives the project manager a means of measuring the appropriate course of action regardless of the situation. Determining where to set this threshold rests entirely on the PM. Morlan makes several comparisons to the decisions of iconic F1 driver Niki Lauda, whose continued success may be credited to his risk management skills. Morlan corroborates Lauda’s knowledge with his own experiences working on a regional project in Central and South America. In Morlan’s case, political conditions across the continent forced his team to adopt a variety of approaches to managing risk, requiring them to establish a standard threshold.

Professional Wisdom

Unlike Niki Lauda’s profession, where improper risk assessment can literally lead to death, project managers are nonetheless faced with decisions that can make or break an important project. Such projects involve the investment of a company’s capital and time, and although failing to “pull-out” at a critical juncture may spell the death of a particular project, it doesn’t necessarily end the PM’s job. As Morlan argues, the wisdom of knowing when to succeed and when to quit is simply the mark of a project manager who has grown professionally.

Read the full blog at: http://blogs.pmi.org/blog/voices_on_project_management/2014/06/manage-risk-like-a-formula-one.html

About Eric Anderson

Eric Anderson is a staff writer for CAI's Accelerating IT Success. He is an intern at Computer Aid Inc., pursuing his master's degree in communications at Penn State University.

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