Lessons Not Learned?
by Ed Fern, M.S., PMP
Much of the death and destruction of Hurricane Katrina was avoidable. We are being asked by the media and our political leaders to focus our attention on the response to the disaster in the days following August 29. There is, however, a valuable lesson for project managers in the events that did not occur before August 29.
On September 8, 1900, a massive hurricane came ashore in Galveston, Texas. Of 37,000 residents, augmented by uncounted tourists, somewhere between six thousand and twelve thousand people died. Galveston is only 304 miles from New Orleans yet, nearly 105 years later, New Orleans was taken by surprise.
In 1988, the people of Denver, Colorado decided to replace Stapleton Airport with a more modern facility. The new facility would be more economical to operate for many reasons, including an Automated Baggage Handling System (ABHS). This system was integrated into the plans in a way that made it impossible to open the airport until it was functioning. Of course, the ABHS was dependent on a massive software development project and software development projects are occasionally late. When Denver published an RFP to produce the required software, they received no bids. When Denver visited Munich, Germany where the only functioning ABHS existed, they were told to allow at least a year to shake out bugs after their system was running.
In October of 2003, Orange County, California government was disappointed to learn that their new health services claims information system was not yet operational. Nevertheless, the County made a decision to stop entering claims information in their existing system. Employees responsible for entering the data were terminated or moved to other jobs. Four months later, the County recognized that their reimbursement from the State would be reduced by 50% if claims were not submitted within six months. The County hired dozens of temporary employees to “catch up” on the data entry. Eighteen months later, the temporary employees are still being paid.
Failures
Failure to spend a few billion dollars to erect adequate sea walls around New Orleans has now cost the lives of thousands of people, destroyed countless buildings, interrupted the refining of petroleum in the midst of an energy shortage, and jeopardized the export of grain vital to our economy and the lives of our offshore customers.
Failure to spend a few million dollars to make tunnels beneath the new Denver airport two meters deeper so they could accommodate manual baggage handling equipment resulted in the airport being a year late in opening. The excess interest costs of that year came to about $500 million.
Failure to spend a few hundred thousand dollars to retain competent data entry employees continues to impose excess costs on Orange County as it struggles to recover from its bankruptcy of 1994.
Risk management is not rocket science. It has just five easy pieces, five questions that must be asked and answered:
1. What might go wrong?
2. How much would it cost?
3. Can we do anything to avoid the loss?
4. How much would that cost?
5. Does it make sense to take action or wait for disaster?
It may also be of some interest to try to estimate how likely the occurrence of each risk event might be, based on Lessons Learned in the past. There is, however, a serious danger in this question. What can happen will happen, sooner or later.
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Author: Ed Fern is asapm's Director of Education, and in his spare time, runs his businesses, Time-to-Profit, and a PM certification preparation website, www.pm-prepare.com. The mentions of his site are ours, not his. Ed’s first article, Six Steps to the Future: How Mass Customization Is Changing Our World, is the all-time record holder for asapm downloads.
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