RISK : IMPORTANT POINTS

I cleared my PMP on 26th may 2014. I have gone through all the three books PMBOK, RITA MULCAHY'S and HEAD FIRST. During preparation I made few notes. so the material has been picked up from all the three books and these are just the key points. 
 NOTE : IT IS RECOMMENDED THAT ONE SHOULD READ THESE POINTS IN DETAIL FROM THE BOOKS (which ever interests you more) AND ONLY AFTER YOU HAVE FINISHED A THOROUGH READING, YOU CAN GO THROUGH THESE POINTS FOR CONSOLIDATION.

RISK

1. Every project team meeting : discuss/ monitor risks. 
2. Risk response strategies = Risk mitigation strategies.
3. Strategies must be timely.
4. One risk - more then one response - OK.
5. Many risks - One response - OK.
6. Risks - involve all - team, other stakeholders, experts.
7. Don't put the amount of money on the risk more then the cost that the risk would have incurred if it happened  - makes sense.
8. Outsource a work package so as to gain an opportunity : Share.
9. Outsource difficult work to a more experienced company : Transfer.
10. Risk that is no longer applicable - close it - return the associate reserve to the company.
11. Reserves are not an additional cost to the project.
12. Plan risk response : Involve all risk owners + other stakeholders, Triggers are identified and added, identify secondary risks.
13. You are working to make a positive impact on  the project - working with an opportunity.
14. Identified risks : No workaround, do qualitative analysis. 
15. Response plan : Sponsor contributes least.
16. PI matrix = Risk rating matrix.
17. If you know the risk tolerance of the stakeholder, you can rank the risks.
18. Estimate with the smallest range : least risky
19. You buy insurance : Transfer
20. You replace a risky equipment with more appropriate equipment : Avoid.
21. Information gathering Techniques : Brainstorming, Interview, Delphi, Root cause analysis.
22. Brainstorming session always has a facilitator.
23. Wrong assumptions are definitely a risk.
24. Risk register : Identified risks, Potential responses and root cause.
25. Watch list : low probability and low impact risks.
26. Risk Categories : Natural, equipment or human.
27. Risk urgency : High, ow or medium.
28. Brainstorming : Just you and your team.
29. Delphi : Experts, whether in team or not.
30. Condition that cause a risk : Trigger
31. Priority : how important the risk is.
32. Urgency : When you need to deal with it.
33. Risk register should have both - opportunities and threats.
34. Risk management plan - Who is responsible for what risk.
35. Secondary risk come from a response you have, to another risk.
36. Residual risk - that remain after risk response.
37. Monitor and control is another change control process.
38. If you need to implement a risk response, you take it to your change control board because it amounts to a change.
39. Risk monitoring should be done at every status meeting.
40. Reserve analysis : check the contingency reserve.
41. Monitor and control risk tools and techniques - all focussed on finding new risks.
42. A negative project risk that has occurred is considered an Issue.
43. Risk appetite, Risk tolerance and risk threshold is part of EEF.
44. Preparation of risk register begin at Identify risk.
45. Perform qualitative analysis - prioritize the risks.
46. Qualitative analysis is a must, Quantitative you have to see if it is necessary or not.
47. Monte Carlo - many simulations.

Please feel free to ask questions or a detailed explanation of any topic. Let me know if you want me to add any topic and if anything you find wrong. Please leave a comment if you find it useful.

HR THEORIES : JUST THE JIST

The picture speaks it all :) 

from (http://www.hrdept.co.uk/blog/2012/12/18/keep-calm-and-call-hr-dept)

These theories are important. all of them. and you have to be very very clear that which theory says what because the questions are going to be direct.

• MASLOW'S HIERARCHY OF NEED OR MASLOW'S THEORY OF MOTIVATION : I picked up this picture from the net. saved me some time of drawing the same :)

Once a lower level need is met, it no longer serves as a motivation. You have to use the next higher level as a motivator. 

Physiological needs (Basic needs) : Food, Clothing and Shelter

Safety and Security need: of health, of property, economic security etc.

Social need: Love, togetherness, Belongingness, Group Members etc.

Self Esteem : Recognition, Confidence, Achievement, Respect from others, reputation etc.

Self Actualization : Creativity, Problem solving, pursue inner talent, Doing what one can do best :)

• HEZBERG'S MOTIVATION THEORY : 

1. Hygiene Factors are something like  working condition, Salary, Personal life, Security, Job status etc.
2. Having the hygiene factor met does not motivate people but the absence of hygiene factors demotivates them and reduces performance. Makes sense, if any one of the above factors is missing, one can not perform to one's best.
3. What motivates people is work itself.

• MCGREGOR'S THEORY X AND THEORY Y :  This theory says that there are two kinds of managers

1. Managers who do not trust their team :(. They believe that people needs to be watched every minute, They believe employees are incapable, they avoid responsibilities and avoid work and so they need continuous supervision and watch: Theory X Managers 
2. Managers who trust their team :(. They believe that people want to work. They do not need any supervision. They believe employees can direct their own efforts. : Theory Y Managers

• THEORY Z : Given by William Ouchy

1. Management believes that the people are Creative and Committed to the long term goals.
2. Believe in "Together everyone achieves more".
3. Both management and Workers need to be involved and they should trust each other.
4. Whole part of a person. Collective responsibility

I found this diagram from this website ( https://mercureaace2013.wordpress.com/page/2/ ) . explains it well. 

• VICTOR VROOM'S EXPECTANCY THEORY : 

1. This theory is built upon the idea that motivation comes from a person believing they will get what they want in the form of performance or rewards.
2. You need to give people an expectation of a reward in order to motivate them.
3. The reward should be achievable. If it is impossible to achieve, it will only demotivate them.

• MCCLELLAND'S ACHIEVEMENT THEORY : AAP (Achievement Power and Affiliation)

People need three things to stay motivated. Achievement Power and Affiliation.

1. Achievement : when you perform well and get recognized for the same.
2. Power : One has a lot of control or influence in the company. Desire to influence, teach or coach.
3. Affiliation : Sense of being a part of the team. Focus on relationship. Avoid conflict.

Please feel free to ask questions or a detailed explanation of any topic. Let me know if you want me to add any topic and if anything you find wrong. Please leave a comment if you find it useful.

PMP PREPARATION : RISK

I cleared my PMP on 26th may 2014. I have gone through all the three books PMBOK, RITA MULCAHY'S and HEAD FIRST. During preparation I made few notes. so the material has been picked up from all the three books and these are just the key points. 
 NOTE : IT IS RECOMMENDED THAT ONE SHOULD READ THESE POINTS IN DETAIL FROM THE BOOKS (which ever interests you more) AND ONLY AFTER YOU HAVE FINISHED A THOROUGH READING, YOU CAN GO THROUGH THESE POINTS FOR CONSOLIDATION.

RISK

EVERYONE should be involved in Risk Identification

• RISK MANAGEMENT : Increase the probability and impact of opportunities and decrease the probability and impact of threats.

We will talk more about the opportunities and threats later in this post

• RISK REGISTER : 

1. List of risks
2. List of potential responses 
3. Root cause of risks

• RISK APPETITE :  High level description of the acceptable level of risk.
• RISK TOLERANCE :  More specific, measurable amount of acceptable risk.
• RISK THRESHOLD :  One specific point where risk becomes unacceptable.

Risk appetite, Risk tolerance and Risk Threshold are part of EEF.

• RISK AVERSE :  Someone who does not want to take risk.

• RISK FACTORS :  

1. Probability (how likely)
2. Impact (range, amount at stake)
3. When (expected time)
4. How often (frequency)

• RISK CATEGORIES (Sources Of Risk) : External, Internal, Technical, Unforeseeable etc.

• BUSINESS RISKS : Risk of a gain or loss. you take a risk. If it worked you get profit if it fails you are in loss

• PURE (INSURABLE) RISKS :  Only a risk of loss. e.g. theft fire.

• UNCERTAINTY : Lack of knowledge about an event reduces confidence in conclusions.

• WORK AROUND : Unknown risk event occurs. Something you did not know and you have not planned, then you do work around. 

Unplanned responses to deal with unanticipated events or problems

• QUALITATIVE RISK ANALYSIS :  Subjective evaluation. no numbers included. you can use this for 

1. Comparing the risk of the project to the overall risk of the other projects.
2. To decide if the project should be terminated or continued.

• RISK DATA QUALIY ASSESSMENT :  The data/ information you have collected about the risk, how accurate/ well understood is that.

• WATCH LIST :  Risks with low probability and low impact. Non critical risks. Document them and revisit and analyze them time and again as the project progresses.

• DECISION TREE : When to use 

1. If you have to use between many alternatives e.g. which option should i choose or how will i solve this problem.
2. In more complex situations.
3. It takes future evens in making the decision today.
4. It can evaluate the cost and benefit of several risk response at once to determine which would be the best options

• STRATEGIES FOR NEGATIVE RISKS (THREATS) : ATMA 

Avoid : Act to eliminate

Transfer : Do not eliminate, shift the impact

Mitigate : Reduce

Accept : Ack and not take any action

Which one to use  : Criticality level  : 

High : Avoid, Mitigate

Low : Transfer, Accept

• STRATEGIES FOR POSITIVE RISKS (OPPORTUNITIES) : ESEA

Exploit : Opportunity is realized, take advantage, assign best resources to it, allocate more funds.

Share : Third party who is best able to capture the benefits

Enhance : increase the probability by influencing trigger.

Accept : Acknowledge and not take any action

Note that accept is in both the strategies.

• CONTINGENCY PLAN : Do something if the risk happens. Should be measurable so that you can evaluate the effectiveness.

• FALLBACK PLAN : Do something if the contingency plan does not work or is only partially effective. 

• RESIDUAL RISKS : These are the risks that remain after the risk response planning.

As the name suggests. A risk occurs, you implement the risk response Planning, still some risks remain. That is residual risk.

• SECONDARY RISKS : Any risk created by the implementation of selected risk response.

A risk occurs, you implement the risk response, because of which some new risk comes up, that is secondary risk.

Be clear. You implemented a risk response. Still some risk left that is residual and some new risk came up that is secondary.

• RISK TRIGGERS : Conditions that cause a risk.

• RISK AUDIT : Outside party. They also audit how effective your overall processes for risk planning are.

• TECHNICAL PERFORMANCE MEASUREMENT : Compare the performance of your project with the planned performance. Check milestones.

• MANAGEMENT RESERVE : 

1. Money set aside to handle any unknown costs that come up on the project
2. Unknown - unknown (you don't know the risk you don't know the impact)
3. Things that you have not planned for but could impact your project.

• CONTINGENCY RESERVE : 

1. Money set aside for controlling risks
2. Known - unknowns (you know the risk but you don't know the impact)
3. Risks that you know about and planned and put in your risk register

Please feel free to ask questions or a detailed explanation of any topic. Let me know if you want me to add any topic and if anything you find wrong. Please leave a comment if you find it useful.

What if my application fall in audit ... PMP

NOTHING :) :) :)
Remember...it's easy...it's only time consuming...and if something has to be done it has to be done :)

Don't be surprised. This is the correct reply to this question. Nothing.
Just like you, I too was really scared for the same. I was not in india (from where all my references were ) and if it happened it would have had created lots of extra work for me.
And that is what exactly happened :) :) :)
My application did fall in audit. I filled up my application with lots of deliberation. Received the acknowledgment and instructions on how to pay and then on a cozy comfy beautiful early morning I decided to pay :)
Payment accepted ... and nothing happened ... then i opened my PMI membership home page and found that "your application has been picked up for an audit" and the instructions to be followed. And the horror looked like this ... ha ha ha

Trust me for two days i felt totally lost realizing at the end off the day that if something has to be done it has to be done


AND TRUST ME IT WAS NOTHING ...

1. There were three forms for three references. PRE FILLED. You or the references do not even have to fill those forms. 
2. These are soft copies. Download them.
3. Mail them to the respective person.
4. He/She has to take a print out and sign it. Put it in an envelope. Sign the envelope from outside and post the same to you. 
5. They can give it to you by Hand. You are not supposed to open it. 
6. Collect the same from all.
7. Put all of them in an envelope. Write address mentioned in the instructions and post.

THAT'S IT :)

now your work is to wait. they say it will take five working days from the day they receive it and believe me THEY ARE QUICK. 
        In my case i received two emails. Sent at the same day same time. One saying your application has been received and the other saying it has been cleared. You can now go ahead and schedule the date for the exam. 

THE ONLY TURBULENCE IT CAN CREATE is 

it will affect you plan. if you were planning to give the exam immediately after paying, you will not be able to do the same. 
so my advice on this
    Fill the application well in advance and Pay. So that if your application fall under audit you have sufficient time to follow the above procedure and it does not affect your preparation schedule or does not disturb you anyhow. It is easy but it is time consuming. As such you have one year to give the exam once your application is accepted. 
    i am sure you will be ready in an year :) :) :)