Posted by: davidhayden | April 12, 2010

The Potential Problem Analysis: The prefect tool to prepare for the unexpected


I had been a mentor for Bob for about a year.  I thought he was well prepared for this project meeting, but I did not know if Bob thought he was prepared.

Bob, the VP of operations, the Operations Manager, a few others and I waited for the Ray, the Production Manager to arrive.  As usual he liked to make an entrance and this time he was in rare form.

While Ray was working his way past Bob to an open seat at the conference table, he tossed down a  substantial report and loudly spoke.  “Well it looks like your perfect plan failed Bob!”

The room fell silent as all eyes turned towards Bob.

Anything that can go wrong will go wrong

If you have been around manufacturing or engineering for more that a few minutes you are familiar with Murphy’s Law.  “Anything that can go wrong will go wrong”

There have been a lot of variations on this “law,” some dating back as far as 1877, but the general concept is always the same.  Something will go wrong.

You can’t break Murphy’s Law but you can prepare for it

Inexperience and overconfidence are the welcome mat for unforeseen problems.  By thinking the plan is perfect, the ability to foresee problems is impaired.  The first thing you must do if you want to survive the unexpected is to realize problems are like coyotes lurking on the edge of a field.

Not quite visible, but not invisible either.

The Potential Problem Analysis

Once you accept the inevitable and realize that problems can and will occur, you are off to a good start.  The next step is to really look for potential problems and plan for them now.

Start by making a chart with the following columns:

  • Potential Problem
  • Severity
  • Probability
  • Score  (S x P)
  • Indicator / Trigger
  • Response / Corrective Action

You may want to generate this table on a large white board, flip chart or spreadsheet.  Personally, I like having it on a spreadsheet so I can pull it out at anytime and go to work.

More heads are better than one

Ideally, your next step will be to bring a team together to suggest potential problems as they can see them.   This is one meeting where you do NOT want “yes men.”  You want your contrarians at this meeting.  Their ability to see bad things will serve you well.

If the team has fear issues and won’t speak up, have them write down the potential problems they see on a piece of paper.  Those suggestion can be gathered in a bowl and gathered anonymously.

The important thing is the participants must feel safe in expressing their opinions.  Many a soul has been relegated to the mail room because  s/he was negative and just couldn’t see the “big picture.”

Make the list and discuss the possibility

Now that you have your potential problems, list them on the board and solicit feed back.  There are  two things you must consider and need feedback on.

  • On a Scale of 1-5 how likely is it this problem will occur? (5 being the most likely)
  • On a scale of 1-5 how severe will this problem be if it does occur? (5 being the most severe)

Take whatever time it takes to gather all these opinions.  Again if the project or situation is politically charged, anonymity may be in order.

Do the calculation

With severity and likelihood predicted, multiply the likelihood rating times the severity rating to establish the potential problem score.  A score of 1 tells you it is doubtful the problem will happen and if it does, so what.

On the other hand, a score of 25 means there is trouble coming and it could cost you your job or business.  You must prepare for the worst.

Indicators and Triggers

This is one area where people often fall down.  They see the problems coming.  They have some idea of the severity.  They may even have an action plan to deal with the problem.

But, because no one is assigned to monitor the indicators, they get blindsided by a problem and find themselves struggling to react.

Before you even launch the project, buy the machinery or whatever,  and knowing the potential problems, work with your team to establish some indicators.  An indicator is any sort of sensory data that can be monitored that will tell you as soon as things are slipping off the track.

Indicators could be schedule slippage, scope creep, budget slippage, delivery problems or whatever.  Identify some early warning signals you can use.

Just because there is an early warning sign, that does not mean things are falling apart.  They can simply be attributed to statistical variation.  That is why you need triggers.

A trigger is any combination of indicators that tell you this could definitely fall off the rails if you don’t do something.  It could be when when measurement gets too high or low.  Or, it could be when a combination of indicators show an unfavorable trend.

You must assign a person or persons to monitor the indicators

This should go without saying, but sadly it is often forgotten.  You must assign someone to be responsible for monitoring the indicators.  It is their job to be alarm system to let the team know there are problems ahead.

These people may or may not be responsible for the corrective actions.

Preventing problems and/or mitigating damage

For every problem you have listed on the board that is deemed severe (you will have to decide that), you should have a corrective action and/or response plan.

You need to know in advance the appropriate response, who is going to be responsible, what actions to take, who will take those actions, how you are going to measure the effect and so on.

This sounds like a lot of work, and it is, but it is much better to do this work ahead of time than at 3 AM in the middle of an anxiety attack and an angry mob of finger pointers.

Your plan will spell, lines of authority, personal responsibility, call lists, appropriate actions before you are in the crisis.

When/if things do go wrong, people will just have to work the plan.

So summarize:

  • Identify Potential Problems
  • Rate their Severity
  • Rate their Probability
  • Determine the severity x probability Score
  • Monitor indicators, respond to triggers
  • Execute the response / corrective action plan

Bob smiled and looked reassuringly at Ray but remained silent.  Before he could speak the V.P. of Operations, looked at Bob then shifted his gaze to Ray and said.

“Your information is old Ray, Bob notified me about this last night. The response plan is in action and it looks as if things will be on track by the end of the month.”

I thought Bob was prepared, I just didn’t realize how prepared he really was.

Don’t you just love it when a plan comes together.

Suggested reading: The New Rational Manager an Updated Edition for a New World

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