Dive into Risk & Project Management

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Month: April 2017

Preparing for a Black Swan Risk

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Hello to everyone,

you all know that I am a fan of Nasim Taleb and one of my favorite books is “The Black Swan: The Impact of the Highly Improbable“, released on April 17, 2007. So, during my internet research, I have found the following papers about “Black Swans Risks” and I want to share with you.

Black Swans Risks

Black Swans are defined as rare, random, and high-impact events and are characterized to be catastrophic and broad.   However, many argue these events are occurring more and more frequently: massive earthquake in Haiti (2010), coal ash spill in Tennessee (2008), and Hurricane Katrina (2005). Some skeptics believe, in hindsight, that these events should have been identified because post-event investigations found warning signs that signaled such an event was likely to occur that experts failed to see in their predictions. In reality, Black Swan events still continue to be unpredictable and unpreventable. Although you can’t prepare for every scenario, but you can establish principles and protocols to be better prepared for the unexpected. A recent thought paper by Ernst & Young explains how to do that.

Principles for Preparing for and Responding to a Black Swan

The paper provides broad-based principles that can be applied to any organization. Having these principles in place before the Black Swan event occurs is crucial to an effective recovery. Here is a brief summary of the core principles:

  1. Establish response goals, assigning leadership to meet those goals and establishing reporting channels during the crisis.
  2. Establish immediate response goals and values in order to limit the impact before a formalized plan is developed.
  3. Empower local leadership and personnel to recognize and mitigate emerging catastrophic risks.
  4. Plan and execute redundant mitigation responses in case the primary response fails.
  5. Know your resources and how to use them during a catastrophe. Leaders should keep track of internal and external recourses including personnel, financial, and physical resources.
  6. Incorporate outside perspectives and experiences into their response strategy.
  7. Remain objective throughout the process when analyzing, discussing, and responding to catastrophic risks.
  8. Maintain the moral high ground by planning and executing responses based on what is right, rather than planning for only the company’s best interest.
  9. Challenge your response strategy with an independent perspective to help identify weaknesses before the Black Swan does.

Response Protocols for a Catastrophe

The paper includes some basic protocols for responding to a Black Swan. The following protocols are not designed to be a step-by-step process but rather a general basis for responding:

  1. Develop risk recognition criteria in order to know when and how to respond.
  2. Develop a quick response team led by a senior manager, typically the COO. This team should include personnel from across the business functions and external advisers. The team should concentrate on containing and minimizing the event.
  3. Create a response team of leaders who should assess the situation, understand the risks faced, and response goals in order to quickly initiate the correct response plan.
  4. Develop multiple response options and categorize them base on largest contribution toward response goals.
  5. Evaluate each option by considering its risk/reward and whether the organization has the capabilities to carry out the plan. Critical assumptions should be documented during this process for future reference.
  6. Implement the response following the guidelines and procedures previously established during pre-event planning.
  7. Assess continually the effectiveness of the response by making corrections as need. After the event, management should discuss lessons learned and incorporate these lessons into training and future response planning.


Black Swans are unpredictable but can be prepared for by establishing identification methods, response goals, and quick response strategies before the event occurs. The principles and protocols that Ernst and Young provided in this thought paper are intended to help guide your organization to establishing a response strategy. Taking this approach can provide your organization with a number of benefits including but not limited to reputation protection, a faster return normal business, and minimization of the impact.

Click the link below to download the thought paper.

Link: Ernst & Young


Stakeholders & Risk Management: 2 educational Case Studies by PMI

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Hello to everyone,

in the PM Network Magazine of January 2017, I read a couple of interesting articles about Stakeholders (SH’s) and Risk Management, I want to share them with you.

We know that stakeholders are those individuals/organizations who are actively involved in our projects and/or have a valued interest in the outcome of those projects.  To put it in other words, they are the individuals/organizationsWe know that stakeholders are those individuals who are actively involved in our projects and/or have a valued interest in the outcome of those projects.  To put it in other words, they are the individuals who will influence or/and be influenced by your project.

1. PROJECT: Chicago Cubs victory celebration,  LOCATION: Chicago, Illinois, USA

So, the first Case Study is about organizing a celebration event at the city of Chicago for the Fans of the Chicago Cubs who were waited 108 years for their Major League Baseball team to win a World Series title. An estimated 5 million people in Chicago, Illinois, USA lined streets for a parade and filled a public park for a rally and this colossal celebration to mark the occasion was arranged in just one day!!!

This was achieved because the Project team started with a successful Stakeholder Identification process that was intergated with basic processes of Risk Management and all the above was combined with the exploitation of previous Lessons Learned from previous events in Chicago.

Key points: 

a. Stakeholders Identified:

a. 5 million inhabitants

b. Public park employees

c. Public transportation employees

d. Police officers

e. Contractor for coloring  the river

f. City hall employees

g. Chicago Cubs team

b. Lessons Learned that were used:

a. Every years St. Patrick’s Day holiday

b. Celebration for winning the National Hockey League

c.  2008 election night rally for President Barack Obama


The 7th largest gathering in human history was coordinated in 1 day!!!

Enjoy the article:   1. SHs case of Chicago

Enjoy a video: Chicago Cubs World Series Champions Parade


     2. PROJECT: Renovation of Les Halles Mall   LOCATION: Paris, Europe

Les Halles early 1900

The second Case Study, is about the Les Halles in Paris. Les Halles was a central fresh food market back at 1863 that was renovated at 1970 as an underground mall connected with Metro (underground train station—encompass six underground levels) and in our days has 150.000 visitors daily! At 2010 there was a decision for a new renovation so the project was about to begin.

  Les Halles in 1970

Reading the article you can realize that in this case the Project Team conducted a detailed Stakeholder Identification process that was followed by successful Risk Management.

Key points: 

a. Stakeholders Identified:

(1) City Government

(2) 750.000 Commuters

(3) Neighboring residents

(4) Local businesses

(5) 150.000 shoppers

(6)  Tourists

So as to build Stakeholders confidence from start to finish, the project team created an exhibition and observation deck next to the project site open seven days a week. The exhibit’s two staffers showed models of the project and answered visitor questions. The team also provided updates via a project website, email blasts and a biannual magazine, Demain les Halles (Tomorrow les Halles).

Moreover, after meeting with stakeholders and consultants, the team decided to increase the number of  mall entrances from seven to nine so as to achieve Stakeholders expectations to become true. It also improved  connections between the  mall and the RER station  and built more spacious  train platforms.

b. Identification of Risks and Responses:

Risks were indentified promptly and proper responses were took place:

(1) Projects work schedules were adjusted according to shoppers, commuters, delivery drivers, shop employees cause closing shops would have an effect of a loss of 4 billion euros.

(2) Combined to the above, demolition work couldn’t happen at night because the vibrations and noise would keep residencies awake. So the main working hours were 7 to 10 a.m.

(3) When contractors began demolishing walls to remodel the train station, they discovered the thickness and construction of some walls didn’t match the initial architectural plans the project team had reviewed. Moreover, the thickest walls had lots of lead and asbestos which required extra remediation work for which the team had to use the Contigency Time reserve.

Enjoy the article:  2. SHs case study of Paris

Enjoy the videos: 1. Forum des Halles My New Paris

                                  2. Unveiling of 1 billion euro revamp of metro, shopping complex

                                  3. Time lapse of Le chantier des Halles et la canopée






Les Halles 2017


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