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7017MAA
PROJECT MANAGEMENT
Dr. Anthony Olomolaiye
Dr. Karim Ahmed
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The Iron Triangle

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The Iron Triangle

Time = Fast 

Cost = Cheap 


Project Quality = Good 

Parameters

Health & Safety

& Project Risk
Management

 H&S Policy Statement

 PRAM
 Risk Matrix
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HEALTH & SAFETY

Learning Outcomes (1)

At the end of this lecture, you should be
able to:
1. Evaluate the importance of H&S in project management
2. Identify some examples of H&S legislation
3. Critically evaluate the duties of the employer in managing H&S
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H&S Management - Basic

Management of H&S within any company is about:
Principles

1. Identifying roles & responsibilities of all concerned

2. Setting up safety standards to be achieved

3. Creating procedures to be followed

4. Ensuring the procedures work (monitoring

effectiveness of procedures)

Fatal Injuries

• One of the main purposes of H & S is to

prevent fatal Injury in projects!

– Fatal Injury = An injury that leads to death

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Main H & S Regulations

- in the UK
The Management of Health and Safety The Workplace (Health, Safety and
at Work Regulations 1999 Welfare) Regulations 1992

The Health and Safety (Display Screen The Personal Protective Equipment
Equipment) Regulations 1992 at Work Regulations 1992

The Reporting of Injuries, Diseases

The Manual Handling Operations
and Dangerous Occurrences
Regulations 1992
Regulations 1995

The Provision and Use of Work The Working Time Regulations

Equipment Regulations 1998 1998 (as amended)

[Link] [Link]/diversity/[Link]
duties/what‐are‐main‐health‐and‐safety‐regulations

Why Manage H&S?

Moral argument Legal argument
Accident: serious injury / Prosecution
death Compensation
Disease: absence from Fine
work / death

Financial argument
Costs:
Direct
Indirect (36xdirect?)
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H&S Executive approach to

Management of H&S
HSE recommend step‐by‐step approach to:

[Link] Policy
2. Planning & Setting Standards
3. Implementing, Organising & Educating staff
4. Measuring and Evaluating Performance

[Link] & Review

Management of Health & Safety @

Work Regulations 1999
• Statutory duty – (Reg. 3)
– Every employer shall make a suitable & sufficient assessment of
risks to employees & others who may be affected by his
undertakings.

– The assessment shall be reviewed if there is reason to believe it is

no longer valid/ there has been a change

– Where there are 5/ more employees the significant findings must be

recorded
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Safety Policy Statements

• Every employer with FIVE or more employees must have a WRITTEN
statement on general policy on H&S,

• together with details of the organisation (‘the how’) arrangements necessary

to put the commitment into practice (‘the who’).

• Must be clearly displayed

H&S Policy
Statements (2)
Need to describe in full:
1. How the company is going to set
up & maintain a safe working
environment
2. What H&S responsibilities already
exist
3. Who is responsible & for what
4. Arrangements for developing safe
systems of work
5. Arrangements for review &
update of the policy
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H&S Policy
Statements (3)
• Contents:
– Aims (not measurable)
– Objectives (are measurable)
• Clear and simple language
• Fairly brief, bullet points/smaller statements
• Signed & dated by the most senior person in the organisation
• May be separate policies for different departments
• Must be posted in prominent position and brought to attention
of new employees at induction

Organising H&S
The policy sets the direction and forms
written intentions
• Organisation of/for H&S needs to be
clearly communicated
• People need to know what they are
responsible for in day to day
operations

[Link]
he/data/posters/workplace‐safety‐poster‐[Link]
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Health & Safety responsibility

Who has responsibility for Health & Safety?
Everyone has
Managing responsibility.
Director Some have more
than others –
Project
Director especially the
‘employer’
Project
Manager

Team
Leaders
Team
Members
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Do Not
Try
This At
Home
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Or This…….

True or False?
This picture represents a high-risk situation

Woof!
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Learning Outcomes (2)

At the end of this lecture, you should be able to:

1. Critically evaluate the importance of risk in a

project
2. Critically evaluate the processes of risk planning,
risk assessment/ & risk control
3. Describe tools used in risk management & how to
use them effectively
4. Assess the process of contingency planning in
project management

Can we REALLY Manage Risk?

We CANNOT eliminate ALL the risks in a project, but we can
ensure the project’s exposure to risk operates at an acceptable
level.
• Some risks are beyond your control
• Planning to implement a series of actions should be
conducted prior to an unwanted event occurring.
• A risk is generally thought of as a crisis that has not yet
happened.
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Key Questions
• What is the risk – how will I recognise it if it
happens?
• What is the probability of it happening –
– high, medium or low?
• How serious a threat does it pose to the
project
– high, medium or low?
• What are the signals or triggers that I should
be looking out for?
• How should I deal with the risk?

Murphy’s Laws
1. In any field of endeavour, anything that can go wrong will go wrong
2. Left to themselves, things always go from bad to worse
3. the one that will go wrong is the
If there is a possibility of several things going wrong,

one that will cause the most damage

4. Nature always sides with the hidden flaw

5. If everything seems to be going well you have

obviously overlooked something
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Adapted ‘Murphy’s Law’

SOMETHING is
seriously WRONG if
EVERYTHING is going
SMOOTHLY on your
project!
‐ Dr. Anthony’s Law
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Image of guy who painted the

whole floor till corner
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What is
risk?
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55%
Definitions of Risk
50% 49% Survey Results
45%

40%
% of Respondents

35%

30%

25%
22% 22%
20%

15%

10%

5% 4%
2%
0% An uncertain
The potential for the Any issue/ The amount that
condition/ event The difference
realisation of event that can be afforded
that has a negative/ between means
unwanted, negative may cause to be lost
positive effect on & ends
consequences of an deviation
Cutter Consortium Centre
[Link]/press/[Link] event/ situation achieving some from the plan
objectives

Risk - Definitions ( BS 6079-3)

The uncertainty inherent in plans & the possibility of

something happening that can affect the prospects of
achieving business/ project goals
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Understanding the Project Risk

Risk = Anything that may impact the project team’s ability to achieve project
success measures & the specific project stakeholder priorities.
 Eliminate/reduce the impact of threats & capitalize on opportunities

threat – “a risk that would have a negative effect on

one or more project objectives” PMBOK® Guide

opportunity – “a risk that would have a positive effect on one or

more project objectives.” PMBOK® Guide

© 2014 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as
permitted in a license distributed with a certain product or service or otherwise on a password‐protected website for classroom
use.

Dimensions of Risk
ABILITY OF ORGANISATION
TO COPE WITH RISK

DANGER
OF REWARD FOR
STATUS SUCCESS
QUO
PROBABILITY OF FAILURE

IMPACT
OF
FAILURE

Proximity (timing) Impact x Probability = Risk Exposure

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Characteristics of
Risks
Risks are characterised by the fact that:
1. they are usually at least partially unknown
2. they change with time
3. they are manageable, in the sense that
action may be taken to change their impact
4. they exist only in the future tense – there
are no past risks, only actual occurrences
5. they exist in all projects

Risk
Affects decision making because people make
assumptions that are not always accurate
Perception
– scared of flying? – prefer to go by car?
– 290 times more likely to be killed in a road
accident than in an aircraft accident
• People can be confused by poorly presented
statistics such as:
– “Eating ‘x’ doubles the probability of dying from
Cancer” - PANIC!

• Which is riskier? Being hit by a coconut or

being bitten by a shark?

• Being hit by a coconut is 10x > than

being bitten by a shark!
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Individuals tend to underestimate:

Risk – risks of familiar things or events
Perception – risks that are physically far away

(2) – risks that are far into the future

– risks they believe they can control
– risks that are presented in a positive
manner
– risks that are perceived to be
unimportant
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Risk Management
The process concerned with conducting risk planning, identification, analysis,
responses, monitoring & control
Opportunities

The objectives of RM are:

1. To increase the probability & impact of Threats
positive events
2. Decrease the probability & impact of events
adverse to business objectives.

Risk
Management
Processes
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Risk Processes & Roles

Review, Control,
Plan Identify Assess Treat Communicate
Close

Risk
Treatment
Management Risk Register Establish Risk Risk Reviews Risk Transfer
Plan
Plan Score

Lessons
Improve Risk Monitor Risk Learned
Score Score

Risk Leader Risk Co‐ordinator Risk Owner

Management
accountability for: Responsible for overseeing the risk Ensure risks are assessed
process Define suitable treatment
Programme / Ensures compliance to & maintenance of plans
operational outputs the Risk Management Plan Manage treatment
Function, business or Establish & oversee maintenance of Risk responses & re‐assessment
lower level risk Registers of current risk level
management activity Schedule Risk Reviews
Escalation within the Issue Risk Reports
risk system

NB: In the absence of a

dedicated Risk co‐ordinator, the
Leader would take over this role

Main Elements of Project

Risk Management Process
Identify &
classify the
risk

Monitor the
risk PRAM
Project Risk Analysis & Management
Analyse the
risk

Respond to
the risk
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Risk Concepts
Risk management elements & process

Nicholas & Steyn (2008)

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Risk Management Process

BS 6079 -3:2000
CONTEXT
What is at risk Business & project objectives
Projects in the context of the business
And why? Business & project boundaries

RISK IDENTIFICATION
What and where Sources of risk
What are the risks?
are the risks? How do they arise?
Grouping & associations Maintain database

Communicate & explain

RISK ANALYSIS
What is known Characteristics
Classification
Monitor effectiveness
about them? Estimates of likelihood
Review objectives,
Potential consequences
decisions & assumptions

RISK EVALUATION Update plans

How important Secondary Set criteria
Decide ranking
Are they? risks Select priorities

RISK TREATMENT
Identify options
What should be Evaluate options
Plan treatment measures
Done about them? Assess secondary risks
Allocate responsibilities
Implement treatment

Identification
Methods
• Professional experience
• ‘What if’ tests and simulation
• Brainstorming
• Experience and expert advice
• Benchmarks and check lists
• STEEPCOIL
 Major output is the Risk Register!
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Project Fishbone Diagram for Finish Package

SUB‐STANDARD UNSATISFACTORY ELECTRICAL

FURNISHING INTERIOR DECORATION PROBLEMS

Low Budget Under‐estimated budget Lack of experienced In‐house

Engineers
Sub standard material Incompetent Contractor Insufficient Materials
supplied supplied
Lack of communication Wrong material choice Faulty Appliances Supplied
with supplier
Insufficient Staff
Unreliable Supplier Overcrowded boxes
Phase
3
Delay
Wrong Specification Wrong Specification

Poor Design Faulty Product

Faulty Product Untested supplier

Faulty Installation Faulty Installation

LIFT FAILURE MALFUNCTIONING

ESCALATOR
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Risk Register
A log of all the identified risks, together with the
following:

– Risk identity number and description

– Activity at risk
– Risk owner or work package manager
– Cause owner
– Risk impact estimate
– Probability estimate
– Risk Trigger
– Risk mitigation strategy

It provides a framework for necessary actions to be taken

& decisions to be made, & should be amended and added
to on a regular basis as the project proceeds.

RISK REGISTER
“The document containing the results of
the qualitative risk analysis, quantitative
risk analysis, & risk response planning.
The risk register details all identified risks,
including description, category, cause,
probability of occurring, impact(s) on
objectives, proposed responses, owners, &
current status.”
PMBOK® Guide
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Project Risk Register

Risk No. Type & Description Likely Cause Probability Impact Action required
(L,M,H) (L,M,H)

Political

Economic

Social

Technical

Environmental

Legal

Risk Assessment Form

ID No Project: Name
Task Project: Number

Date: Classification
Issue
Risk Risk Description Likelihood Impact Risk Reduction Measures Ownership
Number Scope Cost Time

10
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Risk Response Identify

& classify
the risk

Monitor Analyse
the risk the risk

Respond
to the
risk

Risk Response Planning

The process of developing

options & actions to enhance
opportunities & reduce threats
to project objectives.
PMBOK® Guide
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Risk Response Planning

Strategies for dealing with risks in project
management include:
1. risk avoidance – for example, where costs
outweigh benefits, you may decide to refuse a
contract;
2. risk reduction – for example, regular reviews
can reduce the likelihood of an end-product
being unacceptable;
3. risk protection – for example, taking out
insurance against particular eventualities;
4. risk transfer – passing the responsibility for a
difficult task within a project to another
organisation with more experience in that field.
5. risk acceptance – accepting that the risk will
happen (no matter what)
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Risk Probability/ Impact

Matrix
2 v. 2 Grid
high insure/mitigate mitigate/ cancel

rare probable
catastrophe disaster
impact
management
bad luck challenge

accept externalise
low
low probability high

Risk Probability/ Impact

3 v. 3 Grid Matrix

M
Impact

L M H

Probability
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Mapping Risk & Response

Probability
Low Medium High
100%

2 R7
High

75%

ELIMINATE
6

50% Medium

MITIGATE 5

25%

CONTROL
4
7 Low

25% 50% 75% 100%

Impact

Good Practice
• Prevention is better than cure
• Use of preventive measures
– From market research, through design to
customer use and disposal
• Good codes of practice
– De‐commissioning
• Ensure that proper training is provided
– Communicate the information
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Poor Risk Management

• Focusing on ‘today’s’ problems rather than on
‘tomorrow’s’ risks

• Use of generic risk statements rather than identifying

specific risks

• Use of ‘poor‐quality’, or unsubstantiated data for

quantitative risk analysis

• Poor understanding of qualitative risk levels (L,M,H)

• Poor prioritisation of risks wasting time & resources

on the ‘wrong’ risks

• Lack of motivation leading to little ‘risk management’

Contingency
Plan
• Specific allowances calculated on probability
and financial impact

– Financial provision or alternatives plans

for major risks

• Disaster recovery plan

– Prepared in advance by the project team

• Introduce a systematic procedure and train

personnel
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Summary
• Pay attention to H & S in your project
– Some Project Managers have gone to jail
because of “Negligence”
• Focus on PRAM
– Aim to avoid unpleasant surprises
– Or at least ensure risks do not derail the project
• Follow RM processes
• Manage your Risk Register
– Keep risk identification & analysis work up-to-
date with regular risk reviews

Thank You.

Questions?