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RISK AVOIDANCE 199

Employ Strategic Planning Techniques

• Identify objectives and constraints.
• Probe opportunities, threats, and issues.
• Perform stakeholder analysis.
• Gather project team early.
• Gather widespread inputs and gain stakeholder buy-in to strategies.

Remember Murphy’s Law—Everything That Can Go Wrong,
Will Go Wrong

Consider all undesirable risks—evaluate consequences.

• Identify reasonable defenses.
• How they can be avoided.
• How damage can be minimized.
• Compute allowances (time, resources, costs, quality) for the above.

Build In a Reasonable Time Contingency

Repeating what we say in the previous chapter, remember that a CPM schedule
would normally represent the most likely duration of the project. That means, in
essence, that the calculated end date is at the mid-point of the range of dates that
could be achieved. In this case, zero float means a 50 percent chance of meeting
schedule. Is that good enough? We will need to ask “what is the penalty for miss-
ing that date?”

The message, therefore, is to evaluate the potential consequences of a
schedule delay, and to factor in a contingency that is consistent with the
degree of risk. Certainly, we would take greater schedule precautions in the
case of a $10,000 per day penalty contract than we would in a contract without
a delay clause.

Remember, the project completion date, that is supposedly a most likely
calculation, is based on the workscope that has been defined to the system. If
our model has not recognized several activities that might pop up later (a
normal situation), doesn’t the project completion date have even less than a
50 percent chance? How much time contingency should we allow for unidenti-
fied work?

The point is that we must allow a time cushion. How much of a cushion will
depend on: