How to Manage Project Opportunity and Risk

Since I wrote the Foreword for the second edition of this book, risk management processes have become much more widely used, but controversy about what should be done and how best to do it has grown. Managing risk is a risky business. Chapman and Ward provide an in-depth explanation of why it is important to understand and manage underlying uncertainty in all its forms, in order to realise opportunities more fully and enhance corporate performance. They show what best practice should look like. The implications go well beyond the conventional wisdom of project risk management, providing an enlightening new perspective. Professor Tony M. Ridley Imperial College London, Past President, Institution of Civil Engineers Chris Chapman and Stephen Ward continue to educate the profession with this masterful exposition of the differences between, and the potentials for combinations of, risk, uncertainty and opportunity. Particularly welcome is the way they integrate this trio into the project lifecycle the bedrock of project management control and organization. Peter W.G. Morris Head of School and Professor of Construction and Project Management University College London Chris Chapman and Stephen Ward s books on Project Risk Management have been an essential part of my repertoire for twenty years, and they are top of my recommended reading for the courses I do on that subject. In this book they have enhanced their previous work to focus on uncertainty management and emphasise more strongly opportunities for improving project performance, rather then just identifying what can go wrong. A structured process is an essential part of managing project uncertainty, and their process is one of the most powerful. This book will be added to my repertoire. Rodney Turner Professor of Project Management, SKEMA Business School Lille A profoundly important book. With How to Manage Project Opportunity and Risk, Chris Chapman and Stephen Ward take a good thing and make it better. Members of the project management profession have been influenced for years by their insights into project risk management. With this latest instalment the authors demonstrate that risk and uncertainty needn t be dreaded; in fact, the reverse side of the risk coin has always been opportunity. My sincere appreciation to Chapman and Ward for turning this particular coin over and showing readers, academic and practitioner alike, the opportunity embedded in managing projects. Jeffrey K. Pinto Andrew Morrow and Elizabeth Lee Black Chair in Management of Technology Sam and Irene Black School of Business, Penn State Erie

Since I wrote the Foreword for the second edition of this bookrisk management processes have become much more widely used, butcontroversy about what should be done and how best to do it hasgrown. Managing risk is a risky business. Chapman and Ward providean in-depth explanation of why it is important to understand andmanage underlying uncertainty in all its forms, in order to realiseopportunities more fully and enhance corporate performance. Theyshow what best practice should look like. The implications go wellbeyond the conventional wisdom of project risk managementproviding an enlightening new perspective.Professor Tony M. RidleyImperial College London, Past President, Institution of CivilEngineersChris Chapman and Stephen Ward continue to educate theprofession with this masterful exposition of the differencesbetween, and the potentials for combinations of, risk, uncertaintyand opportunity. Particularly welcome is the way they integratethis trio into the project lifecycle - the bedrock of projectmanagement control and organization.Peter W.G. MorrisHead of School and Professor of Construction and Project ManagementUniversity College LondonChris Chapman and Stephen Ward's books on Project RiskManagement have been an essential part of my repertoire for twentyyears, and they are top of my recommended reading for the courses Ido on that subject. In this book they have enhanced their previouswork to focus on uncertainty management and emphasise more stronglyopportunities for improving project performance, rather then justidentifying what can go wrong. A structured process is an essentialpart of managing project uncertainty, and their process is one ofthe most powerful. This book will be added to my repertoire.Rodney TurnerProfessor of Project Management, SKEMA Business School LilleA profoundly important book. With How to Manage ProjectOpportunity and Risk, Chris Chapman and Stephen Ward take agood thing and make it better. Members of the project managementprofession have been influenced for years by their insights intoproject risk management. With this latest instalment the authorsdemonstrate that risk and uncertainty needn't be dreaded; infact, the reverse side of the 'risk coin' has alwaysbeen opportunity. My sincere appreciation to Chapman and Ward forturning this particular coin over and showing readers, academic andpractitioner alike, the opportunity embedded in managingprojects.Jeffrey K. PintoAndrew Morrow and Elizabeth Lee Black Chair in Management ofTechnology Sam and Irene Black School of Business, Penn StateErie

Foreword to this edition by Mike Nichols ixForeword to the second edition with an update by Tony RidleyxiForeword to the fi rst edition by Peter Wakeling xiiiPreface and overview by the authors xvAcknowledgements xxvPART I Setting the scene 11 Uncertainty in and around projects 32 Uncertainty, risk and opportunity 433 Key motives for uncertainty management 734 An overview of generic process frameworks 101PART II The generic process in one key lifecycle stage1315 Define the project 1336 Focus the process 1537 Identify all the relevant sources of uncertaintyresponse options and conditions 1718 Structure all uncertainty 2159 Clarify ownership 23510 Quantify some uncertainty 25111 Evaluate all the relevant implications 289PART III The generic process in all lifecycle stages32512 Fully integrating the strategy shaping stages 32713 Fully integrating the strategy implementation stages 365PART IV Key corporate implications 38914 Developing PUMP capability as a project 39115 Contracts and governance as frameworks for enlightenedrelationship management 41116 A corporate capability perspective 435References 463Glossary 473Index 479