Project Risk Analysis Made Ridiculously Simple

Lev Virine, Michael Trumper

• Publisher: WSPC
• Year: 2017
• ISBN:
  9789814759397
• Topic: Negocios y empresa
• Subtopic: Emprendimiento

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Project management is the art of analyzing and managing risks. Without risk, there is little need for project management. Project Risk Analysis Made Ridiculously Simple offers a step-by-step guide on how to perform project risk analysis and risk management for a wide range of readers: students, project schedulers not exposed to project risk analysis before, and to project risk experts. With this book, you will learn how to:

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• Identify and manage risks over the course of a project
• Perform qualitative and quantitative risk analysis
• Perform project risk analysis using Monte Carlo simulations
• Use event chain methodology to improve project risk analysis
• Perform risk analysis of project portfolios.

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Easily recognizable real-life stories and projects provide a compelling narrative while imparting valuable information on both the theory and practice of project risk management. You will not only understand why project risk management is important to the success of their projects, but you will also know how it can be implemented in your organization and the appropriate tools to use.

-->0 Readership: Anyone interested in the theories and practical overview of project risk management, as a subject of study and for practical applications.
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Part I

Project Risk Management and Qualitative Project
Risk Analysis

Chapter 1

What is Project Risk Management and Risk Analysis?

Why do certain projects fail where other similar projects succeed? Is it the skills of the project manager and team members, availability of resources (including financing), clearly defined objectives, or stakeholder engagement? It could be many factors, but one of the critical ones is a well conducted project risk management and risk analysis process. In this chapter, with the help of a couple of examples, we will explain the basic concepts of risk management and risk analysis. We will also discuss the concept of risk (what is it?), risk properties, risk categories, and risk mitigation and response planning.

Entebbe Raid 1976

On June 27, 1976, an Air France Flight flying from Tel Aviv to Paris with 248 passengers was hijacked by the Popular Front for the Liberation of Palestine (PFLP) who demanded the release of 40 Palestinian fighters held in Israel and 13 other militants held in several other countries. After a brief stopover in Athens and Tripoli, the aircraft and its hostages landed in Entebbe, Uganda which shows the government supported the militants. While the majority of the passengers were released, the 106 Israeli hostages and the plane’s crew remained in Entebbe and the captors threatened to kill the hostages if their demands were not met. After it became apparent that diplomatic efforts were not succeeding, the Israeli army (IDF) decided to attempt a rescue of the hostages. This was an extremely audacious and high risk operation and has become a model for successfully planning and executing similar special operations activities (Dunstan, 2012; Smith, 1976).

The hostage release operation took place on July 4, 1976. Four Israeli planes (four C-130 Hercules and two Boeing 707 for support) left Sharm el-Sheikh in the Sinai Peninsula and flew along an international route over the Red sea. To avoid radar detection, the majority of the flight was at a height of no more than 30 m (100 ft.). The rescue plan required that the Israeli planes fly 4,000 km across unfriendly and potentially hostile territories, land the planes at Entebbe and simultaneously assault the terminal and extract the hostages, control the airport, repel attackers and potential pursuers, and finally fly back. The flight would take approximately 8.5 h, the forces would be on the ground at Entebbe for approximately 55 min, and finally the hostages would be flown away. All told, the operation would be completed in a single night under the cover of darkness.

The Israeli C-130 planes landed at Entebbe. Their cargo bay doors were already open. The Israelis knew that Idi Amin, the president of Uganda, had purchased a black Mercedes. A black Mercedes that looked like the president’s and Land Rovers that usually accompanied the president’s vehicle were to drive from the planes towards the terminal. By pretending to be Idi Amin’s entourage, the Israelis hoped to approach the terminal building without being detected. However, near terminal two, Ugandan guards ordered the vehicles to stop. The commandos opened fire on them and quickly killed them. After they had dispatched the guards, the Israelis approached the terminal and swiftly entered the main hall where the hostages were located. Using a megaphone, they shouted, “Stay down!,” in both Hebrew and English. During the ensuing gun battle inside the terminal hall, three hostages and all seven hijackers were killed.

Meanwhile, the other three C-130 planes landed in Entebbe. They unloaded armored personnel carriers, which would be required to provide defense against Ugandan forces during the hour required for refueling. The commandos also destroyed around 11 Ugandan MiG-17 fighter planes to prevent any pursuit and swept the airfield to gather intelligence. While the Israelis were loading the hostages onto the planes, Ugandan forces started to direct fire at them from the Airport Control Tower (Figure 1.1). The Israelis returned fire and killed 33–45 Ugandan solders. Only one Israeli, Yonatan Netanyahu, a brother for future Israeli Prime Minister Benjamin Netanyahu, was killed and at least five other commandos were wounded. The rescued hostages were flown to Israel via Nairobi, Kenya.

Figure 1.1. Control tower and terminal of Entebbe airport now.

Shabwa Raid 2014

Here is another story. On December 6, 2014, US Special Forces attempted to free hostages captured by Al-Qaeda from a location on the Arabian Peninsula (AQAP) in Shabwa Governorate of Yemen. The first attempt on November 26, 2014 rescued eight hostages, but five hostages, including the American journalist Luke Somers and South African teacher Pierre Korkie, were moved by AQAP to another location before the first raid (Martinez et al., 2014). Luke Somers was abducted in Yemen in 2013. On December 4, 2014, AQAP threatened to execute Somers within three days unless the US met some demands. AQAP also warned that Somers would be killed if another attempt to rescue the hostages was made.

On December 6, 2014, 40 US Navy SEALs in a V-22 Osprey aircraft landed a distance from the compound where the hostages were kept. An AQAP fighter apparently spotted them while relieving himself outside. According to some reports, it also may have been the barking of a dog that alerted the hostage takers. Whatever the source, the hostage takers were alerted, which had dire consequences for the success of the raid. The assault lasted around 10 min when finally US troops were able to enter the building where they found Somers and Korkie gravely injured. They were evacuated to the Ospreys and a medical team tried to perform surgery in transit. However, both Somers and Korkie succumbed to their injuries. Six AQAP fighters were killed and an unknown number of US troops were killed or injured in the raid. Importantly, the operation’s planners were unaware of the identity of Korkie and that a charity group had been negotiating with his captors and his release was imminent (BBC News, 2014). Apparently, the payment had already been made and his release was just a formality.

Why was the Entebbe raid successful, where the Shabwah raid suffered such losses? May be it was just luck? This could have some merit as recent historical analysis partially supports this theory (David, 2015). But perhaps, the difference could be due to superior risk management in the Entebbe case. For example, the Yemeni captors must have been expecting a second attempt to rescue the hostages and this was a major obstacle to successfully executing the plan. However, it appears that this risk was not completely mitigated. Is it possible to mitigate the risk with the chance that one of the captors would be relieving himself outside or catching the attention of a dog? We do not know. But let us examine the successful operation (Entebbe raid) from risk management and risk analysis perspective.

A Qualitative Project Risk Analysis Perspective

We do not know what type of project risk management and risk analysis was done by operation’s planners. But we believe that it was done and done quite rigorously. We would like to use this example to demonstrate you how project risk management and analysis works and why it can be so beneficial. But before we begin, a small disclaimer: we will perform a relatively simple analysis and we do not claim to possess to have exact information in respect to the probabilities and impacts of certain risks; and therefore, cannot give a definite answer from the historical point of view. This example is only intended to illustrate the project risk analysis methodology.

With this high level understanding of the plan, we have enough information to apply a simple forensic risk analysis. Normally, project risk analysis would be performed prior to the start of a project, or during execution, to generate probabilities of meeting project objectives. But in this case, we are trying to determine in hindsight whether the decision to launch the rescue attempt was a well taken chance or a reckless gamble given the extraordinary risks that the team had to overcome.

In the risk analysis process, we have to identify the critical risks, or those risks that will have the most potential to affect key objectives and add them to the risk register, or the list of risk with their properties. In this case, the main objective is to retrieve the hostages with the minimal loss of life. To achieve this, the team would have to avoid early detection, execute the plan on the ground quickly and efficiently, and secure their departure from pursuers. With these objectives, the first major risk identified is “Flight is detected in the air” and element of surprise is lost. The second risk would be to the execution of the actual assault. “Poor or incorrect intelligence” could greatly increase the time to execute or even failure of the assault. For example, hostages could be moved to a different location and the commandos would arrive to an empty terminal. Hijackers could also become aware of the raid when the planes land and this forewarning could endanger the hostages. Bad weather is an additional risk that could cause problems with the flight, landing, assault, and departure. Finally, Ugandan forces might try to pursue departing commandos and hostages on land and in the air.

At t...