Quote from sachinm on 4 October 2023, 8:16 pm

The theory of constraints argues that most systems outcomes are limited by certain bottlenecks (constraints) and improvements away from these constraints tend to be counterproductive because they just place more strain on a constraint.

As an idea we can map constraints using Goldratt’s 5 focusing steps...

Mapping constraints using Goldratt’s 5 focusing steps

Identify the bottlenecks for a situational example, and then see how variations to the system’s complexity (e.g., Volume, Uniqueness of Components, Novelty, Team and Capacity, Stakeholders) can change the nature of the bottleneck.

5 Steps of Goldratt’s explained:

• Step 1: Identify the bottleneck.
• Step 2: Establish whether it is a valid part of the process, or an unnecessary step, i.e., management oversight.
• Step 3: If valid, identify what rest of the processes needs to subordinate the bottleneck.
• Step 4: Elevate the bottleneck, by looking at the rest of the production process to help the bottleneck.
• Step 5: Restart the process, re-check the bottleneck at the new speed and observe how things flow through the bottleneck.

Quote from sachinm on 6 October 2023, 10:41 am

For example, you could challenge that traditional risk approaches are too narrowly focused in stochastic events, and need to be more inclusive of non-event risks, and should encourage proactive identification and management of opportunities, as well as defining impact scales for each project objective. 

This would suggest that risk workshops and checklists should prompt project stakeholders to think about all types of risk, including areas of "uncertainty".

So, “uncertainty” covers much more than just future events that may or may not occur. Four types of uncertainty can be distinguished, each of which could affect the ability of a project to succeed in meeting its objectives. These four include event risks (“stochastic uncertainty”), variability risks (“aleatoric uncertainty”), ambiguity risks (“epistemic uncertainty”), and emergent risks (“ontological uncertainty”).

Citation: Hillson, D. (2014). How to manage the risks you didn't know you were taking. Paper presented at PMI® Global Congress 2014—North America, Phoenix, AZ. Newtown Square, PA: Project Management Institute.

Theory of Uncertainty suggests a disconnect between strategic vision and tactical project deliverables by narrowingly focusing on tactical threats. This can be overcome by widening the scope of risk management to encompass both strategic risks and upside opportunities, creating an integrated approach which can bridge the gap between strategy and tactics.

To overcome this inadequate attention to the proactive management of risks that could affect those objectives, David Hilson has suggested that Integrated Risk Management can address risks across a variety of levels in the organisation, including strategy and tactics, and cover both opportunity and threat.

Strategy and tactics are connected through project objectives, which are both affected by uncertainty, leading to risk at both strategic and tactical levels. An integrated approach to risk management can create significant strategic advantage by bridging the strategy/tactics gap, and dealing with both threats and opportunities, to enable both successful project delivery and increased realisation of business benefits.

Elements of this Integrated Risk Management approach include :

• Bridging the strategy/tactics gap to ensure that project delivery is tied to organisational needs and vision.
• Focusing projects on the benefits they exist to support, rather than simply on producing a set of deliverables.
• Identifying risks at the strategic level which could have a significant effect on the overall organisation, and enabling these to be managed proactively.
• Enabling opportunities to be managed proactively as an inbuilt part of business processes at both strategic and tactical levels, rather than reacting too little and too late as often happens.
• Providing useful information to decision-makers when the environment is uncertain, to support the best possible decisions at all levels.
• Creating space to manage uncertainty in advance, with planned responses to known risks, increasing both efficiency and effectiveness, and reducing waste and stress.
• Minimising threats and maximising opportunities, and so increasing the likelihood of achieving both strategic and tactical objectives.
• Allowing an appropriate level of risk to be taken intelligently by the organisation and its projects, with full awareness of the degree of uncertainty and its potential effects on objectives, opening the way to achieving the increased rewards which are associated with safe risk-taking.
• Development of a risk-mature culture within the organisation, recognising that risk exists in all levels of the enterprise, but that risk can and should be managed proactively in order to deliver benefits.

Citation: Hillson, D. (2006). Integrated risk management as a framework for organisational success. Paper presented at PMI® Global Congress 2006—North America, Seattle, WA. Newtown Square, PA: Project Management Institute.