Putting it in perspective with M_o_R

Putting it in perspective with M_o_R

Every activity and situation carries risks. Whether you’re launching a new project, providing ongoing services, or spearheading a strategy for widespread organizational change, fully and effectively managing the risks involved is essential to ensure long-term success.

The M_o_R (Risk Management) methodology, owned by the OGC and administered as a rating by the APMG, provides a set of generic principles and processes to identify, analyze and manage risks that may occur in a business context. This framework is aligned with the other management methodologies associated with OGC (notably PRINCE2 and MSP), but is designed for use in an organization or business context.

A risk can be defined as an outcome that is uncertain and would (if it occurred) affect the organization’s objectives or outcome. Despite popular usage, therefore, a risk need not be a negative. It is imperative that a risk manager (or, indeed, any type of manager) knows how to manage both positive and negative risks for the highest benefit of the organization.

Risks affect all levels of activity within an organization. The M_o_R framework draws attention to four key levels (or ‘perspectives’), each of which requires a tailored approach to risk management.

M_o_R: Strategic Perspective

Within M_o_R, the ‘strategic’ perspective encompasses long-term decisions related to the overall direction of the organization. These risks may not be immediately apparent and may remain undiscovered for some time after a decision has been made.

For example, a local council might decide to provide a more equal education for all primary school students in its district. This strategy may have clear long-term benefits in terms of individual, institutional, and local academic achievement. It may also entail long-term risks, such as reducing additional opportunities for students at the higher end of the academic spectrum. This may not be apparent for several years.

Managers responsible for evaluating the board’s strategy should analyze the likelihood and potential impact of such risks to enable the most effective approach to risk management.

M_o_R: Outlook Management Program

Medium-term goals are achieved through the perspective of program management. This is the level at which the strategy becomes a viable program of change. Program-level risk management refers to the decisions that are made about how the strategy will be accomplished and the risks that are implicit in each of those decisions.

For example, the local council may decide that the primary school curriculum should be standardized and aligned with that of the local secondary school. This could bring important benefits, such as the adequate preparation of all primary students in the basic subjects. It can also boost parental confidence and force low-performing schools to raise basic standards. However, the program could also reduce the individuality of the primary school curriculum. There is a risk that schools and children who thrive on a less structured curriculum will begin to perform poorly under the new restrictions.

To effectively manage risks at the program level, the risk manager must assess the likelihood and significance of the risk against the expected benefits of the change.

M_o_R: project perspective

Project management is concerned with delivering a set of results (or ‘outputs’) according to a predefined scope, budget, schedule, and quality specification. Risk management at the project level deals with potential incidents or problems that would affect the outcome of the project.

For example, the local council may decide to create a standard exam for primary schools, to ensure that all students are adequately prepared in the core subjects. This project will involve the collection of a body of knowledge recognized as “basic” for primary school students, the preparation of an acceptable system for testing students, and the implementation of this new testing system in local primary schools.

Both the goals and the risks of this project will be more immediate than those involved in the Strategic and Program perspective. Project risks may include: dispute over material recognized as ‘basic’; resistance from teachers and/or parents; failure of tests to accurately assess students’ understanding of the material.

The project risk manager must consider how each of these risks can be managed most effectively to ensure delivery of the project outcome to the desired scope and specification.

M_o_R: Operational Perspective

Risks are more immediate at ground level, and operational risk management requires a high level of independent and thoughtful structured response to turn project output into real benefits.

Operational risks for the primary school examination scenario considered above may include logistical difficulties in organizing and processing examinations, or inadequate preparation of students to deal with examination situations. Those responsible for implementing the new exams must be prepared to deal with problems that may arise during the operation. This preparation goes through the identification of risks and an exhaustive analysis of the effect that these risks can have on the concrete results and the benefit of the educational strategy of the council.

Summary

Understanding the perspective is critical to understanding the M_o_R approach to risk management within an organizational setting. People at all levels must be aware of the standard processes, techniques, and challenges involved in managing the risks associated with their activities and responsibilities.

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