FOREWORD TO THE SECOND EDITION

Businesses today face unparalleled capital project risks. These risks include, for example, ever-changing regulatory requirements, unprecedented financial turbulence, growing technological complexity, and geopolitical upheaval. These types of uncertainties will remain center stage for the foreseeable future.

Increasingly, shareholders are demanding capital project predictability. Consider a recent report from Booz Allen Hamilton that indicated that the majority of energy industry executives:

•  are dissatisfied with project performance (40% of capital projects experience cost and schedule overruns). This level of dissatisfaction is at its highest ever.

•  agree that poor project performance is not acceptable when the market expects predictability and strong returns.

•  accept that they cannot afford to miscalculate project risks, yet they do not have a good grasp on to how to manage them.

How, then, is the project manager (PM) to deliver on project objectives in a climate of increasing uncertainty and escalating shareholder expectations for project predictability?

It is now widely accepted that risk management is as indispensable to project management as project management is to achieving project predictability. So where can PMs find a tried and true risk management process?

Enter Practical Project Risk Management: The ATOM Methodology, second edition, by Dr. David Hillson and Peter Simon. The first edition provided a straightforward, succinct guide for the risk practitioner and PMs alike. The Active Threat and Opportunity Management (ATOM) methodology can be applied to projects of any size and in any industry. It gives “practical sense” steps to tackle threats and capture opportunities. As a risk practitioner myself, I have found the explanations clear and thorough. It’s not hard to tell that Hillson and Simon have had decades of experience at the front lines providing expert coaching and mentoring on risk management.

A number of value-added sections have been added to this second edition. The authors have:

•  included updates to the material to reflect recent developments in the field of risk management, for example ISO31000;

•  expanded the envelope of understanding on the importance of the personal aspects of risk management, such as risk attitude and the role of effective facilitation;

•  added a new chapter detailing the interface between the ATOM process at the project level and the need to manage risk at the program level;

•  created a new risk response strategy called escalate.

Some of the most useful information for my particular circumstances is found in Part III: Variations on a Theme. In Chapters 13 and 14, Hillson and Simon describe how to customize the ATOM methodology for small and large projects. They compare and contrast each major activity of the process. For example, they explain how the number and depth of risk reviews dramatically increase from small to large projects.

In the epilogue, Hillson and Simon suggest myriad pragmatic steps covering areas ranging from appointing an organizational risk sponsor, to tailoring the ATOM process, to the training of staff, and to implementation and roll-out.

As the community manager of PMI’s Project Risk Management Community of Practice, I have the pleasure of direct contact with David Hillson. David lives and breathes the proper implementation of risk responses, the identification and capturing of opportunities, and the documentation of lessons learned through post-project reviews. You’ll find that this book is replete with examples of his ideas about these areas, as well as real-world advice for the PM and risk practitioner in terms of how to do the risk management process.

Risk management is a tool that assists the PM in properly identifying, mitigating, and responding to capital project risk. Hillson and Simon have illustrated a rigorous methodology that provides tremendous insights and practical ways of addressing the numerous capital project risks faced by the PM today. They have given the PM steps that link her everyday actions to the achievement of project objectives leading to more predictable capital project results.

Much like I have, you’ll return to its pages time and again. As the playwright of your particular project risk management masterpiece, you will achieve greater heights by adhering to this seminal script.

Clint B. Dietze, P.Eng., M.Eng., PMP

PMI Project Risk Management Community of Practice Managers, 2010-2012

July 2011