You have developed an excellent plan for a key project. You and your team have plotted it all out, step by step, and written it out in exquisite detail. Now it's time to execute, right? Not just yet.
No plan is perfect - not even yours! The rational manager will take one more step, as described by Charles H. Kepner and Benjamin B. Tregoe more than 30 years ago in their book The Rational Manager (A Systematic Approach to Problem solving and Decision Making)
Download my MSWord template and follow along as I take you through the basics of this important technique.
- List all the steps in your plan in the first column, labeled "Plan Step."
- For each step, brainstorm what might go wrong. List these potential problems in the second column ("Potential Problems") Important: bring in an internal devil's advocate or two for this step - one or two people who were not involved in building the original plan. They will help you see problems you might miss.
- For each potential problem, estimate the probability that it might occur (I use High, Medium and Low). Note that rating in the third column ("P").
- For each potential problem, estimate the impact it could have on your project if it occurred (I use High, Medium and Low for this, too). Note that rating in the fourth column ("S").
- In column five, I just use letters for the risks from the "P" and "S" columns. For example, a high probability potential problem that would be very serious if it occurred would get "HH" in this column. The rest of the steps need be done only for those potential problems that rate HH in column five. If you have time, you can deal with HM and MH potential problems, too, but focus first on HH.
- For each of these high priority problems, brainstorm actions you can take now to prevent them from occurring.
- In case that fails, for each high priority problem, brainstorm methods you can use to detect trouble early, before it impacts on your project.
- Finally, for each high priority item, brainstorm contingency actions you could take if the problem occurred in spite of all your careful work.
Now, take the actions you identified in step six and step seven as you execute the original plan. And be ready to invoke your step eight actions if you need to.
PPA is not pessimistic - it recognizes the reality that no plan is perfect and things really do go wrong. PPA is not an academic exercise - it's a real world tool that works. Let me close with a real-world example.
A few years ago a wood pulp processing plant in New Zealand was planning a very complex annual maintenance shutdown. Plants like this one must run 24/7 for as many days as possible each year. Annual maintenance shutdowns are often required, but any extra day can cost hundreds of thousands of dollars. Problems can easily add millions to costs.
For this shutdown, a key project required several tons of special pellets from Japan. Delivery of those pellets on time was identified as a risk during a PPA exercise. As the pellets were produced and delivered by others, the plant team did not identify any preventive actions. However, they did find an alternate source for the pellets (albeit at slightly higher cost) and put in place contingency plans to get those pellets if something went wrong in Japan.
Guess what? A major problem occurred at the plant in Japan, and it became clear the pellets would be three weeks late. If the PPA had not been completed, the mill would have lost three weeks of production waiting for the pellets. However, the mill team put their contingency plan in place, the alternate pellets arrived on time, and the shutdown was completed as originally planned.
PPA works. Use it!
(Note: If you wish to save my template for later use as a template on your computer, choose "Save As" and choose "Document Template" in the "Save as type" box.")
