PMBOK® Seventh Edition Principles and Risk Management

    2=Planning, 3=Execution, 4=Control

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The Project Management Institute (PMI) released the PMBOK® Guide, Seventh Edition in August 2021. This edition is a principles-based guide as opposed to the process-based guide of the Sixth Edition. In this article, let's look at each principle and why each one matters with respect to managing risks.

What are Principles?

Rather than telling project managers what to do, the PMBOK® Guide, Seventh Edition provides general project management principles. These universal principles guide the behavior of individuals.

For example, one of the PMBOK® principles is to optimize risk responses. The guide does not give a prescribed step-by-step methodology. Instead, it simply says that project managers should "continually evaluate exposure to risk, both opportunities and threats, to maximize positive impacts and minimize negative impacts to the project and its outcomes" (PMBOK® Guide, 7th Edition, The Standard for Project Management, p. 53).

Let's take a look at each of the 12 principles.

Principle :  a law or fact of nature that explains how something works or why something happens –Merriam Webster Dictionary

1. Be a Diligent, Respectful, and Caring Steward

Project managers are encouraged to be good project stewards. We are entrusted with the resources and responsibility to deliver valuable products, services, and results. How does this occur? First, we must be diligent, that is to say hard-working, never giving up. Second, be respectful to your team members, vendors, end-users, customers, and other stakeholders. And third, care about the project and your project team, as well as the project's impact on external stakeholders. 

Risk Management Implications

If project managers fail to be diligent, things may begin to unravel; the project will likely lose momentum. Being disrespectful to others may result in a breakdown in team harmony and create division. And if you don't care about the project and team, who will? A poor attitude affects others.  

2. Create a Collaborative Project Team Environment

When we collaborate with our project team, we work together to achieve the project objectives. Project management is the application of knowledge, skills, and techniques to project requirements. Where do the knowledge, skills, and techniques come from? It's not the project manager alone – the project team members contribute too.

Risk Management Implications

What happens when the project environment is not conducive to collaboration? Team members feel left out and will be less likely to provide the input needed for project success.

3. Effectively Engage With Stakeholders

It's not enough to simply identify stakeholders. Project managers must engage their stakeholders. For example, a project manager may engage end-users to elicit, analyze, document, and verify project requirements. Another example would be to facilitate a risk identification workshop with key stakeholders.

Risk Management Implications

When project managers fail to engage stakeholders, they will miss out on key perspectives required for planning and executing the project, resulting in rework, additional expenses, adverse impacts on the schedule, and team morale issues. 

4. Focus on Value

I've seen project managers spend months managing projects only to deliver a product that was rarely used. How could this happen? Well, project managers may deliver a product or service that lacks qualitative and quantitative value.  

Risk Management Implications

When initiating and planning a project, make sure that you understand the true needs of the end-users. This requires the use of business analysis skills to dig deeper into real problems or opportunities. You may use prototypes or other models to analyze the user's needs. Once understood, we can create products and services that are useful and valuable.

5. Recognize, Evaluate, and Respond to System Interactions

A project is a system composed of people, technology, processes, and other interdependent internal and external working parts. Project managers should think holistically and manage the impacts of changing internal and external conditions. Better yet, anticipate the changes and adjust plans accordingly.

Risk Management Implications

Systems thinking allows project managers and team members to identify more risks. For example, one would likely see the changing needs of end-users and customers and be able to adjust the project approach. Decisions can be made for not only the project but the overall organization. 

6. Demonstrate Leadership Behaviors

Leadership is the ability to influence others including individuals, groups, and organizations. There are different leadership styles such as laissez-faire, directive, and autocratic, to name a few. Great leaders understand when and how to change or blend their leadership styles depending on changing conditions. Furthermore, individuals can lead at different levels of an organization, program, or project. One does not have to be given authority to be a leader.

Risk Management Implications

Projects invariably have difficult situations. For example, the project team members may have conflicts with one another. Project managers can use the soft skills of leadership to communicate, facilitate, and enable the team members to resolve conflict and make the optimal decisions. 

7. Tailor Based on Context

Some project managers make the mistake of using the same project management plan for all of their projects irrespective of the size or complexity of the project. Today, more project managers are learning to tailor the plans to be "just enough" to achieve the project objectives. The project manager includes the appropriate components such as:

  • Subsidiary plans (e.g., schedule management plan)
  • Baseline (e.g., approved budget)
  • Ancillary plans (e.g., process improvement plan)

Risk Management Implications

When project managers fail to tailor their plans, they end up with a bloated plan that no one uses. And poor planning results in poor execution.

8. Build Quality into Processes and Deliverables

Quality seems to be an obscure concept. However, it is simply "the degree to which a set of inherent characteristics of a product, service or result fulfills the requirements" (PMBOK® Guide, Seventh Edition). The bottom line is whether we are actually meeting the end-user's needs (even the ones that are not stated). 

Here's the Quality principle: "Maintain a focus on quality that produces deliverables that meet project objectives and align to the needs, uses, and acceptable requirements set forth by relevant stakeholders."

There are two areas of focus – processes and deliverables.

A process is a series of steps that taken resulting in output that is of value internally or externally. For example, project teams may follow a step-by-step process to create a product or service.

We want our business processes to be efficient, effective, defect-free, and to reduce rework.

Additionally, we focus on quality deliverables. We want to create a defect-free deliverable, one that can be relied on.

Risk Management Implications

Focusing on process quality can result in numerous benefits. For example, we can produce outputs with greater value and expedite delivery.

And consider quality deliverables. Users will not be happy with defective deliverables which will result in customer complaints, rework, and higher expenses to correct.

Quality is never an accident. It is always the result of intelligent effort. –John Ruskin

9. Navigate Complexity

Some projects are more complex than others due to the number of risks, events, conditions, and stakeholders. For example, consider a project that includes the implementation of a vendor's policy management system for an insurance company. The policy management system has ten interfaces to other applications. Imagine the level of effort to communicate and coordinate the required work with numerous vendors, end-users, managers, and team members. 

Risk Management Implications

There are numerous risks that may arise when navigating complexity. For instance, there are unknown-unknown risks and black swans leading to greater uncertainty. Additionally, the end-users give vague requirements. And regulatory issues may arise during the project.

10. Optimize Risk Responses

Every project has threats and opportunities. The project manager has the responsibility to maximize the positive risks (opportunities) and minimize the negative risks (threats). The project manager is not a lone ranger. Rather, risks are assigned to risk owners who have the appropriate knowledge, skills, and techniques to manage the risks. And keep in mind, that not all risks require a response. Risk responses are created in accordance with the organization's risk attitude, appetite, and threshold.

Risk Management Implications

Some project teams spend much time identifying and evaluating risks and never actually respond to the risks. Until action occurs, the risks remain. Risk owners should develop and implement risk response plans that are cost-effective, and that will achieve the desired results. 

11. Embrace Adaptability and Resiliency

Here's the principle: "Build adaptability and resiliency into the organization's and project team's approaches to help the project accommodate change, recover from setbacks, and advance the work of the project."

Internal and external changes occur during projects. Therefore, project managers and their teams must adapt to the changes. 

And some projects take major blows such as the removal of key team members, increased requirements, unexpected issues, tighter deadlines, and missed milestones.  It's critical for the project manager and team to press on, remain diligent, and be resourceful.

Risk Management Implications

When project teams fail to manage changes through a project change control system, scope creep may occur resulting in missed deadlines and higher costs. As a project evolves, look for opportunities to deliver greater value. Ask yourself, "What does this change allow?" 

Some projects are more unpredictable. Project managers and project sponsors can prepare their teams for unexpected changes and circumstances. Using an agile, change-oriented approach will allow the teams to respond better to these uncertain events and conditions.

12. Enable Change to Achieve the Envisioned Future State

The world is in a constant state of change. Globally, we see economic, political, regulatory, and social change.

And organizations evolve to deliver greater value to their customers. Companies look for ways to increase revenue and decrease expenses leading to higher profits.

With our projects, we create new products, services, or results. Each project helps the organization to move from its current state to the desired future state. 

Risk Management Implications

Project managers must be strong change agents. One practical way to manage change is by identifying risks. The causes of these risks (significant uncertainty) may be external and internal changes. Once you understand the causes, the risk, and the potential impact, you will be in a better position to determine which risks matter and respond accordingly.

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