7 principles of Stephen covey for project mangers to tackle risks
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| − | === 7 Habits of Stephen Covey === | + | ==== 7 Habits of Stephen Covey ==== |
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| − | === Risk and Framework for Risk Management === | + | ==== Risk and Framework for Risk Management ==== |
Risk is an uncertain event or condition that, if occurred could have a detrimental positive and/or negative effect (ref). Overall risk is the effect of uncertainty of individual risks at all levels, aspects or domains of an organization, which means it is the culmination of individual risks in Enterprise, Portfolio, Program, and Project domains. To manage complexity that comes with the uncertainty of risks, there is a need for an integrated view of risk management to define the construct of organizational governance and operations framework. The framework is as follows: | Risk is an uncertain event or condition that, if occurred could have a detrimental positive and/or negative effect (ref). Overall risk is the effect of uncertainty of individual risks at all levels, aspects or domains of an organization, which means it is the culmination of individual risks in Enterprise, Portfolio, Program, and Project domains. To manage complexity that comes with the uncertainty of risks, there is a need for an integrated view of risk management to define the construct of organizational governance and operations framework. The framework is as follows: | ||
Revision as of 23:46, 17 March 2022
Abstract
Risks are inherent challenges to any organization, which dealt with proactively, can prove to be an asset with respect to managing the threats and opportunities that arise. Uncertainty of external and internal events are faced by all organizations. A sound business strategy that realizes a set of objectives for risk management is a great tool for organizations to tackle these uncertainties. Stephen Covey in his book “7 Habits of Highly Effective People” talks about what are the principles a person can follow and adhere to being successful. This book is revered by many organizational professionals who apply its principles to develop themselves and produce effective results. In this article we take a closer look at risk management principles while elucidating the opportunities and threats that accompany risks by comparing them with the principles of Stephen Covey’s book. The purpose of this article is to highlight the similarities between the risk management principles and Stephen Covey’s principles and in turn present a universal quasi-personification of Organizational Risks. The article focuses on making risks more comprehensive and risk management more malleable to both risk managers and organizations as a whole.
Introduction
There are two main works that this article focuses on. An in depth understanding of the “7 Habits of highly effective people” written by Stephen Covey and the Risk Management Standard authored by PMI is the core of this article.
The book ”7 Habits of Highly Effective People” (ref) is a success book for individuals trying to hone their problem solving and decision-making capabilities. Covey first published this book in the year 1989 by researching the preceding 200 years of “success” and what are people’s perception of achieving successful results. He talks about how people should be versatile in their perceptions towards a situation and the demand for change of that situation. Covey noticed a trend shift in how people viewed change and identified success. In earlier times, the foundation of success rested upon the “character ethic” (things like Integrity, Humility, Fidelity, etc.) But the trend that Covey noticed in the later years was that the way people looked at success gravitated towards “personality ethic” where success is a function of Personality, Public image, Attitudes and Behaviors etc.
Covey in the essence of the book says that both approaches of character development and personality development are fundamentally important for all people trying to achieve success. "The way we see the problem is the problem,"(ref) Covey writes. And this is where he puts forth the 7 habits to talk about the importance of both approaches.
- Habits 1, 2, and 3 are focused on self-mastery and moving from dependence to independence.
- Habits 4, 5, and 6 are focused on developing teamwork, collaboration, and communication skills, and moving from independence to interdependence.
- Habit 7 focuses on continuous growth and improvement and encapsulates all the other habits.
The risk management standard authored by the PMI talks about risks and risk management for organizations. All organizations encounter risks because of both activity and inactivity due to internal and external factors. Risks are difficult to manage because of their variable impact i.e. big and small. Hence it is very important for organizations to be vigilant. Goals and objectives aligned with business strategies require operation plans and change plans. Change is uncertain, inevitable, and necessary for competitive sustenance. (ref) To manage change and risks that come along with it, there is a need for a robust set of strategies of risk management. Risk management is the process of balancing opportunities and threats in all domains of the organization (Enterprise, Portfolio, Program and Project).
Enterprise risk management (ERM) reflects an organization’s culture, capabilities and strategies to create value and by sustaining this value, an organization covers all policies, processes and methods to manage risks. ERM methodologies can also translate to Portfolio risk management, Program risk management and Project risk management. (ref) Organizations need to build adaptive frameworks of risk management to align with competitiveness and confront increasing complexity attached with goal attainment and decision making. Complexity exists in various aspects of workflow (Human behavior, Systems behavior, uncertainty and ambiguity). Thus arises a need for integrated view of risk management to define the construct of organizational governance and operations.
A construct of risk management framework is the risk management lifecycle. (ref) It ensures a structure regardless of different domains in an organization and risk management requires execution of the risk management lifecycle. Due to complexity and uncertainty, a robust risk management lifecycle would require adhering to risk management principles for effective results.
The 7 principles of risk management from the PMI standard (ref) for risk management and the 7 habits of Stephen Covey seemingly have similarities among them. These 7 principles of risk management form the framework for Risk Management Lifecycle which in turn is the basis for ERM. With all the uncertainty that comes with risk, an added perspective of quasi-personification of organizational risk management principles is beneficial for tackling risks. This article is an extra guide to consider when looking at Enterprise Risk Management.
The article first illustrates the 7 habits of Stephen Covey (ref) followed by a basic understanding of the framework of risk management i.e. the Risk Management Lifecycle (ref). In the end the 7 risk management principles given in the PMI (ref) are elucidated and how they are similar to the 7 habits of Stephen Covey, giving insight on where these can be used in the Risk Management Lifecycle
7 Habits of Stephen Covey
Principle 1: Be Proactive.
Covey talks about circle of concern and circle of influence and shows two approaches to a problem or a situation based on having a reactive or a proactive character. A reactive person focuses on responding to external forces after they have transpired. They would also complain or worry about the circumstances and the consequences of any event good or bad. Whereas a Proactive person would take responsibility of any event that has transpired or will transpire. They focus on the things they can control and are in a constant strife to learn from and more importantly take action for both internal and external forces that they can change.
Principle 2: Begin with the end in mind.
Covey mentions that a successful outcome either for a short-term or a long-term goal depends what the perceived outcome is. We can use our imagination to develop a vision of what we want to become and use our conscience to decide what values will guide us. The summary of what he explains is that we need to set goals and set control on doing things before someone or something else takes control.
Principle 3: Put first things first.
Covey says “The challenge is not to manage time, but ourselves” (ref) and “The key is not to prioritize what’s on your schedule but to schedule priorities,” (ref) when talking about the importance of time management and scheduling tasks. The first two habits focus on developing an individual’s mindset but this third habit talks about personal time management of a successful individual. Covey even suggests a matrix to help individuals be able to categorize tasks based on their urgency and importance which enables us to prioritize tasks. Each of these quadrants has a detrimental effect on how to prioritize responsibilities.
Principle 4: Think Win-Win.
Covey’s fourth habit moves from an independent to an interdependent habit where he observes the commitment patterns of individuals. The observations show us that there are six paradigms to human interactions, and they are, “WIN – WIN”, “WIN – LOSE”, “LOSE – WIN”, “LOSE – LOSE”, “LOSE” and “WIN – WIN or NO DEAL.” The paradigms involve two parties who either lose or win in working in coherence with each other. Covey states the ideal way to achieve successful results and developing a strong character, one should always aim for a situation where he WINs and make sure that the person he is working with does not lose to get the most benefit. Often people who LOSE or perceive to LOSE will not comply with the terms of a deal and possibly benefit from it if there would be low or no profit. Based on the consideration and courage factor we can say that the ideal outcome for any interaction would be “WIN – WIN” paradigm. The “WIN – WIN or No Deal” paradigm can be considered an alternative for “WIN – WIN” because it liberates an individual from the need to manipulate people and push their own agenda.
Principle 5: Seek to understand and then to be understood
Every human has an opinion and wants to be heard because every opinion is valid. Every person jumps at the opportunity to provide solutions or their understanding of a situation without considering that others too have a say in that situation. Usually people tend to prescribe a solution before they diagnose the problem. It is hard for an individual to have a different frame of reference than that of their own and it takes time to shift their focus from self to others and they must be willing to do so. “Empathetic listening takes time but it doesn’t take anywhere near as much time as it takes to back up and correct misunderstandings when you’re already miles down the road, to redo, to live with unexpressed and unsolved problems, to deal with the results of not giving people psychological air”, Covey says. By this he says that we need to practice empathetic listening before we do anything to avoid mistakes due to miscommunication down the line when it is too late.
Principle 6: Synergy
The next step would be to synergize with others. By understanding and valuing the differences in other people’s perspectives, an individual has the opportunity to create synergy, which allows people to enter new levels of openness and creativity. Synergizing allows an individual to overcome obstacles they would never have done before because they have adopted all the other habits of independence and interdependence. When a person adopts habits 4 and 5, people automatically pool subjective desires of their own to tackle a problem with others with different ideologies. The versatility and the adaptability that comes with different perspectives is why organizations do projects with multidisciplinary teams..
Principle 7: Sharpen the saw
The last habit is all about renewal and persisting to improve. It is likely that a lot of effort and time is taken up by adopting the previous habits into one’s life, but it is important that one should not be swallowed up by the failures and continue to develop themselves. All the previous habits need to be constantly improved and developed. People need to focus on developing themselves through the mentality “You either win or you learn.”
Risk and Framework for Risk Management
Risk is an uncertain event or condition that, if occurred could have a detrimental positive and/or negative effect (ref). Overall risk is the effect of uncertainty of individual risks at all levels, aspects or domains of an organization, which means it is the culmination of individual risks in Enterprise, Portfolio, Program, and Project domains. To manage complexity that comes with the uncertainty of risks, there is a need for an integrated view of risk management to define the construct of organizational governance and operations framework. The framework is as follows:
- Articulate Objective
- Define internal and external parameters for processing an effective risk management life cycle
- Establish risk criteria within the scope of risk management lifecycle and iterate these criteria.
The main part of the framework for risk management is the Risk Management Lifecycle. The PMI (ref) standards illustrates the steps an organization need to take in order to build a sound risk management strategy.
Risk Management Life Cycle: The different phases of Risk management lifecycle are assessed in terms of its purpose and success criteria. The sequence of logical phases in life cycle approach which is also an iterative process is as follows:
- Plan Risk Management: A plan describes how risk management processes should be carried out and how they fit. It needs to be adaptive to the requirements of the work and stakeholder demands.
- Purpose: To develop an overall risk management strategy, how risk management processes will be executed and integrate risk management with all other processes.
- Risk appetite: It is the acceptable consideration of stakeholders like tolerance to uncertainty and relative importance, thresholds and critical values of risk management etc. achieved by sharing a common understanding.
- Success Factors: Acceptance by stakeholders; Identification of bias and correction; Alignment with internal risks and external constraints and priorities; Balance between cost and benefits/efforts; Competencies and comprehension.
- Identify Risk: It is important to distinguish genuine risks and non-risks.
- Purpose: identify practicable risks. Iteration and repetition of risk management helps. Identifying risk is important to identify risk responses, which will be discussed later in this section. With input from different stakeholders, identification of risks aims to expose and document present and emergent risks, which allows the organization to create contingency plans and assign relevant risk owners to monitor these risks.
- Success factors: Early Identification; Iterative Identification; Emergent identification; Comprehensive Identification; Explicit identification of opportunities; Multiple perspectives; Linking risks; Complete risk statement; Ownership and level of detail; Frequent and effective communication; Minimize bias.
- Perform Qualitative Risk Analysis: It is subjected to singular risks. It is the process of categorizing and prioritizing risks to efficiently manage them.
- Purpose: Understanding in detail by considering probability of occurrence, degree of impact, manageability, timing of possible impacts of causes and/or effects. Although it does not address overall risk results with combined effect of other risks.
- Success factors: Use agreed approach; Use agreed definition of risk terms; collect credible information; perform interactions.
- Perform Quantitative Risk Analysis: It provides insight into combined and overall effect of risk this includes correlation with other risks, interdependency, feedback loops etc.
- Purpose: To provide a numerical estimate of overall risk. Results are used to evaluate likelihood of success and estimate contingency reserves. Not all cases can be quantified, hence both the qualitative and quantitative analyses are required but both can be of varied importance due to their subjective nature. Both approaches cover individual risks and overall risks.
- Success factors: Prior risk identification and opens insight into qualitative Risk analysis; Appropriate model/framework; competence with technical tools; commitment to collect credible risk data; unbiased data; Inter relationships with risks.
- Implement Risk Responses: Once the planning is done, the risk owner then implements these plans and looks for secondary associated. Effective communication is key.
- Purpose: carry out risk responses if and when risk should occur.
- Success factors: Accountability of risk owners; Stakeholder commitment to implement the risk responses; Effective communication; Contingencies and management reserves are made available.
- Monitor Risk: It is the process where the ability to re-evaluate the status of risk is assessed. It helps identify emergent, residual, and secondary risks which helps determine the effectiveness of risk management. Relevancy of risks over time becomes obsolete with change and monitoring of foreseen and unforeseen risks helps organizations to create sound risk management practices for the present and future. It is possible through periodic risk assessment practices.
- Purpose: track and maintain viability of risk response plans.
- Success factors: Integrated risk monitoring; continuous monitoring of risk trigger conditions; Maintaining risk awareness.
