Active Planning
The idea of a contingency plan (“a plan B”) is nothing new. Obviously, more complicated processes or solutions require more complicated plans. It’s a basic rule in any kind of even semi-formalized project management that some sort of contingency plan be developed in case things go wrong.
Typically, this process consists of reviewing the project plan and brainstorming with a team to identify where assumptions break down. For example, step 144 comes before step 145. But what happens if step 144 doesn’t occur?
The group will attempt to name all the different ways that this plan could fall apart. The drivers fail to show up. The parts are delivered to the wrong location. The wrong parts arrive at the right location. Parts are damaged in transport. And so on, until all the most likely items are listed.
In the least effective form of contingency planning, the next step is the last: the group tries to figure out what to do then. “All right, if we expect to lose 5% of the parts due to damage, let’s be sure we load the trucks with 5% more parts than we need.” Step by step, the group comes up with a game plan for each.
A more effective form of planning goes one step further. It assigns a weighting to each of these. A weighting is a way to gauge the impact of the problem. Although many weighting systems can be used, they usually consist of at least two variables, something like: “how many people are affected by this problem” and “how long could this problem last.” In some cases, it’s loss of sales versus loss of customers, or delay to the schedule versus hit to the budget, or any two other critical variables. Then, for each problem, a scale number is assigned for each of the two. The two are multiplied together (although some methods simply add them for convenience). For example, if we think that a 5% loss of product to damage is bad, we need to know how bad. On a scale of 1 to 100, what’s the impact to the project schedule? The group decides that rates about a 60. On a scale of 1 to 10, how many people are affected by it? The group concurs this rates about a 3, since there are other trucks making other deliveries. Multiplying them together gives this problem a weighting of 180. When all the problems have been assigned a number, you sort the list: the most serious problems now appear at the top, the least serious go to the bottom. With this sorting, you begin to see which are the bigger risks in order.
In the most successful form of management, you don’t stop there: you actively begin correcting problems before they occur. Using our example from above, let’s assume that the 5% damage problem was the highest weighted score of all the problems identified by the group. The team decides to address that first: why would 5% of the product be damaged? A person in distribution says the packaging provides poor protection, and using the other containers would fix that. A driver points out that there’s no way to protect the containers in the trucks right now; but a simple latching system can address that. A clerk mentions that the loading dock workers tend to handle the packages roughly, but if the driver coaches them, the dock workers tend to get it right. These suggestions are implemented.
The next week, the group goes through the list of potential problems again. The latches have been ordered, the containers exchanged, and the drivers are happy to provide the dock workers key suggestions on handling the materials. After another vote, the weighting drops to 80. Once the latches arrive next week and are installed, this score should drop to 10.
Each of the identified risks must be evaluated actively each and every week. To the average person, this seems like a sensible plan: why wait for the problems to happen? Get in there and start to fix them before something breaks.
But to a contingency planner, there’s another reason for this active approach: unless your scores go down each and every week, you have no evidence your plan will work. Instead, all you have is a hope. But by reviewing the weighting each week for every risk, you are providing proof your plan will work.
Another way to look at it: by the time the project hits its most critical part, your contingency plans could have a weighting of 10 or less...meaning you’re largely guaranteeing success.