#WEF Global Risks 2013 Edition–Fastest Growing Risks


I.  Introduction

The World Economic Forum’s Global Risk Report 2013 was published in November 2012.   Among other things, the report ranks global risks in terms of which have the most likelihood and which have the most potential impact if they do end occurring.    

An interesting feature added in this year’s report was a summary of those global risks which, even if not the most likelihood or most impactful, are those risks which are the fastest growing, and therefore deserve special attention.

The purpose of this post is to list those fastest-growing risks in both categories of likelihood and impact and to discuss them.  

II.   Fastest Growing Risks for 2013 in terms of Likelihood

Just as a reminder, the top five MOST LIKELY global risks for 2013 were the following (on a scale from 1 to 5, the higher the number, the greater the likelihood:

1.  Severe Income Disparity (4.22)—Economic

2.  Chronic Fiscal Imbalances (3.97)—Economic

3.  Rising Greenhouse Gas Emissions (3.94)—Environmental

4.  Water Supply Crisis (3.85)–Societal

5.  Mismanagement of population ageing (3.83)–Societal

In contrast, the top five FASTEST GROWING global risks for 2013 in terms of likelihood were the following.

1.  Unforeseen consequences of new life science technologies (2.68 → 3.11)

Specifically called out are possibilities of of genetic manipulation through synthetic biology leading to unintended consequences or biological weapons.

2.  Unforeseen consequences of climate change mitigation (2.80 → 3.23)

Climate change mitigation includes engineering strategies that, if they were to get out of control, could amplify rather than lessen climate problems.   Furthermore, not all mitigation strategies are readily reversible, and some can be only be fully validated if they are tested on a global scale, which of course increases the impact if the interventions create unforeseen consequences.   

3.  Unsustainable population growth (3.05 → 3.45)

This risk category is what the experts who wrote the Global Risk report call a “Center of Gravity”, meaning that it connects with risks from all of the five categories (economic, environmental, geopolitical, societal and technological).   Some of the earliest effects of climate change which we have already experienced are food and water shortages, which reduce the amount of global population that can be sustained with the given supply of those natural resources.

4.  Hard landing of an emerging economy (3.07 → 3.46)

The surprisingly low GDP reading for China of 7.7% growth in the first quarter of 2013 shows that the risk of a hard landing for the world’s second largest economy is growing.   

5.  Mismanagement of population ageing (3.44 -> 3.83)

The percentage of the population that are seniors will go from 22% at present to 32% by 2050 in the developed world, and in the same time frame the figures for seniors in the developing nations will go from 9% to 20%.   

III.   Fastest Growing Risks for 2013 in terms of Impact

Based on the responses from the experts, the top five MOST SEVERE global risks for 2013 were the following:

1.  Major Systemic Financial Failure (4.04)—Economic

2.  Water Supply Crisis (3.98)—Societal

3.  Chronic Fiscal Imbalances (3.97)—Economic

4.  Diffusion of Weapons of Mass Destruction (3.92)–Geopolitical

5.  Failure of climate change adaptation (3.90)–Environmental

In contrast, the top five FASTEST GROWING global risks for 2013 in terms of likelihood were the following (the scale is the same, from 1 to 5).

1.  Unforeseen negative consequences of regulation (2.77 → 3.18)

A theme emerged at the World Economic Forum that government regulators need to be conversant with the same risk management techniques as risk managers in the private sector.   However, the global financial crisis of 2008 was a result of the unforeseen negative consequences of deregulation, where some of the financial innovations created in its wake that were supposed to reduce risk ended up increasing it, with the public sector being the one that in many countries ended up footing the bill for the risk miscalculations of the private sector.   

2. Unilateral resource nationalization (3.02 → 3.40)

The example that comes to mind is China’s attempt to corner the market on certain rare earth metals that are used in the manufacture of electronics.    

3.  Chronic labour market imbalances (3.38 →  3.73)

In other words, unemployment rates.   The impact of these imbalances on society especially, in Europe, are growing increasingly severe as the global economy continues to face multiple challenges (China’s hard landing, and the protracted recession spurred on by austerity measures first in Europe and now in the United States).  

4.  Hard landing of an emerging economy (3.15 → 3.49)

As mentioned above, China’s GDP growth rate in the first quarter of 2013 was only 7.7%, which caused many to talk increasingly loudly about the possibility of a “hard landing” for what is the world’s second largest economy.    Note that this is also on the list of fastest growing risks in terms of LIKELIHOOD as well.    When a risk grows in both impact AND likelihood, it’s time to pay it a lot more attention.

5.  Mismanagement of population aging (3.36 → 3.67)

Again, this is a risk which also is on the list of fastest growing risks in terms of LIKELIHOOD.   Being a risk that connects all five global risk categories together, a so-called “Center of Gravity” on a map that portrays all the global risks and their interconnections, it is significant that this too is growing in the experts’ minds the fastest both in terms of likelihood AND impact.  

IV.  Conclusion

The five factors mentioned above (two technological, two societal, and one economic in the case of likelihood; three economic, one societal, and one geopolitical in the case of impact) are the factors which need to be paid attention to the most after the top five in either category of likelihood or impact, because they are growing the fastest and could, if left unchecked, be in the top five within the next year or so.

5th Edition PMBOK Guide–Chapter 9: Tuckman’s Team Development Model


The process 9.3 Develop Project Team has as one of the key tool & techniques Team-Building Activities, which includes the formal kickoff meeting to launch the project.

One of the models that can help a project manager take a number of disparate individuals and to mold them into working together as a team is Tuckman’s Team Development Model, a model developed by psychologist Bruce Tuckman back in 1965 to describe the stages that a team goes through in working on a project.   (NOTE:   The original model had the first 4 stages only, and the 5th stage was added later in 1977.)

1.  Forming

The team meets and learns about the project and their formal roles and responsibilities.   A project manager needs to set the correct tone at the beginning, preferably at the kickoff meeting.   Which reminds me of a story I told once in our project manager’s Toastmasters Club back in Orange County, CA.   There was a guy who was having coffee with his neighbor who worked in a florist shop.    The florist looked something was bothering him, so the project manager asked him what the problem was.

Florist:  “Our shop is facing heat from some of our customers because some delivery orders got mixed up.”

PM:   “Oh, what happened?”

Florist:  “The regular delivery guy didn’t show up, someone we got somebody to fill in for him who didn’t know the customers as well.   He delivered one set of flowers for a project manager having a meeting to launch a project.   Everybody was dismayed when they entered the room, because the floral arrangement had a sign saying “Our deepest sympathys”–that one was supposed to go to a funeral home!”

PM:  “Gosh, I can see why the project manager was upset!”

Florist:  “Well, that’s not the worst of it.   Meanwhile, the funeral home got a floral arrangement that said, “Have a great kickoff!”

You definitely want to start the kickoff meeting with the sense that people should be receiving a card which says “Congratulations”, rather than “Our Deepest Sympathys”!

2.  Storming

Now that the members know each other and what their roles and responsibilities are supposed to be, the team begins to address the project work itself.    When there are two different approaches that could be used to reach an objective, there will be person A who wants to take approach #1 and person B who wants to take approach #2.   How does this situation get resolved?   Conflict resolution is, in fact, the subject of another post, but the point to remember here is that a project manager needs to be able to do an “ego bypass” operation so that the objectives merits of each approach are being debated, rather than it being a contest of wills between two personalities.   The team needs to start seeing that the team effort is not a zero-sum game of “if I lose, someone else wins.”   What will it take in terms of sacrifice of one’s time, efforts, and in addition to one’s cherished opinions, which will cause the team to win?    If members are able to make that paradigmatic shift from the “I” to the “we” perspective, then they are on their way to the next phase.

3.  Norming

Team members begin to work together and adjust their work habits and behaviors to support the team, and thereby start to trust each other.   In this stage the “we” perspective has been established.

4.  Performing

Now that the “we” perspective has been established, and the group is working well together, meaning that the team is as its peak efficiency, meaning that 100% of its energy is focused on doing the work and striving against problems, rather than each other.

5.  Adjourning

The team completes the work and moves on from the project.    This stage was added by Tuckman in 1977, and it takes particular significance in a project management setting, as it is important to encapsulate the experience of the team on the project in the lessons learned which can be documented and passed on to the organization so that the next project does not have to “reinvent the wheel” when it comes to solving problems.

Just like with the initiation of the project in the kick off, the formal closing of the project should also set the right tone, hopefully a congratulatory one if the project was successful.

In conclusion, there are three important points to remember about these 5 stages of the Tuckman Team Development Model:

a.   Sequential

The main point of Tuckman’s team development model is that the stages must be done in sequence.   The group cannot work together (performing) if it does not see itself as a group (norming) and spends its time fighting each other rather than the problems the group faces (storming).

b.  Stages are earned

As opposed to stages of physical development over which a person has little direct control, the development of a team can be arrested at any stage if the requirements of that stage are not fulfilled.   It is not a given that the team will go on to the next stage; that must be earned by the ability of the team to master those team-building skills that go with each stage.

c.  Stages are reversible

If there is some sort of crisis or other shock to the project team that comes from outside the team (either from within the organization or outside of it), then the team may regress to an earlier stage.    If the team has dealt smoothly with all of the problems that they have encountered so far on the project, the project manager cannot be complacent.   There may be some sort of unanticipated risk or shock that occurs (fire at a supplier or other interruptions to the supply chain, for example) that creates a new problem to be solved of greater magnitude than faced before by the team.   With higher stakes, higher emotions may flare up and differing opinions may threaten to take an organization from the performing  stage right back to the storming stage.

A project manager who is aware of these stages can help move the team through them in an effective manner.

 

 

5th Edition PMBOK® Guide—Chapter 9: Process 9.3 Develop Project Team


 

1.  Introduction

The third out of four human resource-related processes is in the executing process group, and it is used to develop the group of individuals assembled as the team members for your project and to get them to work together as a team.

2.  Inputs

The inputs come from the first process 9.1 in the form of the Human Resource Management Plan and the second process 9.2 in the form of the Project staff assignments and Resource calendars, which tell who is working on the project and for what time period

9.3  DEVELOP PROJECT TEAM
INPUTS
1. Human Resource  Management Plan The portion of the human resource management plan that is used in this process is the one that identifies training strategies and plans for developing the project team
2. Project staff assignments This is an output of the last process 9.2 Acquire Project Team:  it tells who is going to be on the project, and what their roles and responsibilities will be.
3. Resource calendars This is an output of the last process 9.2 Acquire Project Team:  it tells when the team members are going to be available to do team development activities.
TOOLS & TECHNIQUES
1. Interpersonal skills These are the so-called “soft skills” such as communication skills, emotional intelligence, conflict resolution, negotiation, influence, team building, and group facilitation.
2. Training Activities designed to enhance the competencies of team members.
3. Team-building activities This is crucial to the success of the project.  Typical models for team building include the Tuckman ladder (see separate post).
4. Ground rules Clear guidelines for acceptable behavior by team members stated at the beginning of the project can reduce misunderstandings from happening on the project itself.
5. Colocation Placing the most active project team members in the same physical location, either temporarily at the beginning of the project or for the entire project.
6. Recognition and rewards Recognizing and rewarding desirable behavior tells team members that they are valued by their organization and in particular by their project team.
7. Personnel assessment tools Gives insight into strengths and weaknesses of team members.
OUTPUTS
1. Team performance assessments This is an assessment not of the individuals on the project team, but how they work together as a team.
2. EEFs updates The training that goes on to develop the team should be notated in the employees’ training records.

3.  Tools & Techniques

The tools & techniques are a varied lot, from skills on how to handle team members (interpersonal skills and personnel assessment tools), the guidelines for team member behavior (ground rules) and their physical environment (colocation), to training them individually (training) and as a group (team-building activities).  Also included are ways to encourage team members to work towards the project goals (recognition and rewards).

4.  Outputs

The team performance assessments are not the same as individual performance evaluations, but evaluations of how well the team works together.  Any training that members receive either as individuals or as a group should be recorded in their training records.

The core of this process is tool & technique #3, Team-Building Activities.  The next post will be on the five stages of developing a team called the Tuckman ladder.

5th Edition PMBOK® Guide—Chapter 9: Process 9.2 Acquire Project Team


1.  Introduction

The second out of four human resource-related processes is in the executing process group, and is where the project manager acquires his or her project team.

2.  Inputs

The input of this process is the Human Resource Management Plan, the output of the previous process 9.1 Plan Human Resource Management.  The other inputs come from the Enterprise Environmental Factors, the background information from the industry and the governmental regulatory framework within which the project takes place, and the Organizational Process Assets, the cumulative experience the organization itself has with regards to Human Resources in the form of policies, guidelines, and standard processes.   of course.

9.2 ACQUIRE PROJECT TEAM
INPUTS
1. Human Resource Management Plan This is the output of process 9.1 Plan Human Resource Management.  The particular elements of the plan that are inputs into this process are:

  • Roles and responsibilities of project team members
  • Project organization charts (indicates number of team members needed)
  • Staffing management plan (indicates the time periods when team members needed)
2. EEFs
  • Existing information on team members
  • Personnel administration policies on outsourcing
  • Organizational structure (projectized, functional, matrix, etc.)
  • Colocation or multiple locations
3. OPAs
  • Organizational standard processes, policies, role descriptions
TOOLS & TECHNIQUES
1. Pre-assignment Project team members may be selected in advance—this may be stipulated even in the project charter.
2. Negotiation Project management team may need to negotiate with the following entities to obtain their team members:

  • Functional managers
  • Other project management teams within the organization
  • External organisations (suppliers, vendors, etc.)
3. Acquisition Hiring consultants or subcontracting work to another organization.
4. Virtual teams Video conferencing makes team members available who do not meet face-to-face.
5. Multi-criteria decision analysis Rating the potential team members by the following criteria:

  • Availability
  • Cost
  • Experience
  • Ability
  • Knowledge
  • Skills
  • Attitude
  • International factors
OUTPUTS
1. Project staff assignments Documentation of the assignment of people to the project team.
2. Resource calendars Time periods when people are available to work on the project.
3. Project management plan updates If the team members selected do not have all the necessary requirements, the roles and responsibilities may have to be adjusted.

 

3.  Tools & Techniques

As far as the tools & techniques are considered, certain team members may be stipulated by pre-assignment in advance as having to work on the project, to the point that they are mentioned in the project charter.  This gives additional “negotiating power” to the project manager in the next technique, that of negotiation.  Especially if the organizational structure is a functional rather than projectized one, where the project manager has no direct authority over his or her potential team members outside of the project, the team members need to be “borrowed” from the functional manager, or perhaps from other ongoing projects.  In some cases, if the organization is working closely on design work, for example, with a vendor or supplier, someone from that vendor or supplier may work temporarily at the organization in order to facilitate on-site coordination of the project between the two companies.

What if there is no one qualified and available to do a particular activity or work package on the project?  Then you can try use the technique of acquisition to hire someone temporarily for the purpose of working on the project.  Nowadays, organizations that have different offices around the world can have team members from different countries work on the same project through virtual teams.  PMI is careful to point the additional risks with regards to communications that can occur with virtual teams.  In the same way that different customer requirements need to be balanced to create the technical requirements of the project, there are different factors that need to be balanced to choose the best team members for the project, and multi-criteria decision analysis can be a useful tool in doing this.

4.  Outputs

Once the team has been chosen, the list of those on the project team are contained in the project staff assignment, and the timing of when they are available is contained in the resource calendars for that project.

There may be some adjustments to the Human Resource Management Plan, which is a common feature of project management, where the plan may have to adjust to reality of the project rather than the other way around.

Once this process is over, the project manager will have a collection of team members that will work on the project.  Taking the team members who are plural and turning them into an entity which is singular called a team is what the next process is about, 9.3 Develop Project Team, and that is the subject of the next post.

5th Edition PMBOK® Guide—Chapter 9: Organizational Charts and Position Descriptions


The day before yesterday, I set out the inputs, tools & techniques, and the outputs for process 9.1 Plan Human Resource Management.

The first tool listed for this process is that of Organizational Charts and Position Descriptions.  There are three types of formats that can be used to describe the positions that people hold on the project and what their level of involvement is in various aspects of the project.

1.  Organizational Charts

This is familiar to most people as giving a hierarchical breakdown of the various positions in the organization and their relationships.  However, in a project you can have an organizational chart that states the roles and responsibilities of the project team members, rather than the organization as a whole.

This is particularly helpful if you have a matrix-type organization that is a hybrid between a functional and projectized organizational structure, where the lines of authority within a project need to be clarified if the project team members do not report to the project manager in the organization as a whole, but rather to a separate functional manager.

2.  Responsibility Assignment Matrix

This is a matrix which indicates for the various activities or work packages within a project who is going to be:

  • Responsible (who will do the work)
  • Accountable (who will make the decisions)
  • Consult (who will be asked if there are questions)
  • Inform (who will be informed of the results of decisions or of progress)

The letters spell the acronym RACI so sometimes this kind of matrix is referred to as a RACI chart.

3.  Position Descriptions

This is familiar to most people as giving an outline of the duties of the people in various positions within the organization.  In the case of a project, however, the position description indicates what the duties of the person will be as a project team member.

The templates for these organizational charts and position descriptions come from the organization’s process assets or OPAs, an important input into the process.  Among other things, the process fills in these charts, matrices, or lists, and they are then an output as part of the Human Resource Management Plan.

Once the Human Resource Management Plan has been developed, the project manager can then go about obtaining the people he or she needs for the project in the next process, which is 9.2 Acquire Project Team, which is the subject of the next post.

Super-Competent Communicators


At the Leadership Conference held last Saturday in the Chicagoland District 30 of Toastmasters International, Lance Miller spoke about how he honed his skills as a speaker in order to become the 2005 World Champion of Public Speaking, and as a leader in order to turn his home club Renaissance Speakers into a champion club.

He became a Distinguished Toastmaster a while back, and after becoming a World Champion speaker, his could one possibly improve? His answer is to set himself the goal of doing one Competent Communicator manual, the basic speech manual that all Toastmasters start out with, every year. He’s on his 22nd or 23rd Competent Communicator award.

He does this to hone his basic skills while he pursues other educational and leadership goals. I have decided to copy his example and work on a Competent Communicator award while pursuing my Advanced Communicator and Advanced Leadership awards as well. I intend to become a world-class speaker as well, and this, I’m convinced, is the way to do it!

5th Edition PMBOK® Guide—Chapter 9: Human Resource Management Plan


One of the outputs of process 9.1 Plan Human Resource Management is, not surprisingly, the Human Resource Management Plan.  The purpose of this post is to discuss what elements are in the plan, and why they are there.

From the organization’s point of view, the element of the plan that deals the most with the acquisition of the team is the staffing management plan.  This is important for process 9.2 Acquire Project Team.  The reporting relationships and other interactions on the team that are illustrated in the project organizational charts are important for the process 9.3 Develop Project Team.  Finally, the roles and responsibilities that the members will fulfill are important for the process 9.4 Manage Project Team.

 

ELEMENTS OF THE HUMAN RESOURCE MANAGEMENT PLAN
 
1. Roles and responsibilities For those people on the project team, the following should be described:

  • Roles—the function of that person on the project
  • Authority—the extent to which that person can approve resources, make decisions, sign approvals, accept deliverables, etc.
  • Responsibility—the duties that person is supposed to perform
  • Competency—the skills and capacities that person is supposed to perform.
2. Project organizational charts Graphic display of the project team members and their reporting relationships.
3. Staffing management plan Describes when and how team members will be acquired and for how long they will be needed.

This often includes the following elements:

  • Staff acquisition plan
  • Staff release plan
  • Resource calendars
  • Training needs
  • Recognition and rewards
  • Regulatory compliance
  • Safety issues

These three elements of the human resource management plan assist the project manager and the team to carry out the other three processes.  The next process, 9.2 Acquire Project Team, will be outlined in the next post.