As project managers, we tend to focus on immediate risks that need urgent attention. However, it’s often the ‘everyday’ risks that can accumulate, and it’s useful to reconsider project risk by applying the special and common cause concept from process improvement.
It’s natural for human beings to remember big, random and unexpected events. In project delivery, we tell war stories about the time there was a major regulatory change that shifted the course of an entire project, or when there was a catastrophic technology or equipment failure.
However, we’re more likely to forget about the routine inefficiencies and minor inconveniences that may have been annoying at the time, but fade into distant memory as the months and years pass by. We might grumble about the team that was consistently late to deliver at the time, but we probably won’t be talking (or thinking) about it years down the track.
While this may be a very human instinct, the tendency to remember the big events and forget day-to-day challenges may actually be impacting the way you manage risk on your project. That’s why it pays to think about two very distinct types of project risk: special cause and common cause.
Defining special cause and common cause risk
We’ve borrowed the terms special cause and common cause from the world of process improvement, where they’re used to talk about variation in a process. In simple terms, variation in a process is expected but not ideal, meaning that a stable and effective working process has low levels of variation.
Special cause variations are unexpected events or conditions that create discrepancy. Generally, they have not been planned for in the defined process, and they often have significant impacts. It may also have a long and potentially unclear resolution path.
Common cause variations are natural occurrences in the system or ways of working. They may even be quantifiable or known. A great example of this might be a team taking slightly more or less time to complete a task than expected. It’s not ideal, but it’s manageable.
In project terms, we think of special cause risks as those unusual, unexpected, one-off events that can cause significant impacts. Examples might include unexpected regulatory changes, the sudden loss of a key team member, or a catastrophic technological failure.
In contrast, common cause risks are those that are inherent in the project and occur regularly. These risks may be seen as part of the “normal” operating conditions, and while they may be manageable, their impacts can accumulate over time and individual items can still have a big impact on a project. Depending on the nature, they can even erode the benefits in your business case, having a significant longer-term effect on your project’s overall performance.
Examples of common cause risks in your project include consistent delays in obtaining approvals, poor effort estimation, or chronic under-resourcing of teams.
If you take a look through most project business cases or risk registers, you’ll find a heavy balance towards special cause risks. That’s hardly surprising, considering most projects are attempting to achieve new outcomes. It’s normal to look for the significant events or conditions that could get in the way of that progress.
What you may not see captured in great detail is common cause risks – however, they often have a higher likelihood of occurring than your identified special cause risks. What’s more, a series of common cause occurrences can end up being the proverbial “death by a thousand paper cuts” to your project.
While the special cause risks often (rightfully) take up a lot of time and energy when they occur, it’s the less obvious risks that can undermine or cascade over time.
How do you prepare for common cause risks?
Preparing for common cause risks requires a multi-pronged approach. First and foremost, it’s about removing your own experience bias as a project lead. As humans, it’s natural to want to apply our previous experience to our current experience. While instinct and learned experience can serve us well, it can also let us down if we’re blind to potential common cause risks.
For example, estimating the completion of a project deliverable based on your experience in a previous project or organisation may provide a useful baseline. However, it does not factor in the differences between the past and present. Perhaps the present team has less experience, more demands, and their processes and tools are outdated. What took a week in the past might be two months with the new conditions.
A second key strategy is managing the human tendency to normalise common cause risks. Because these risks occur regularly, they often blend into the background and are perceived as being “part of the job”. This makes them less identifiable, and therefore less likely to be addressed.
People tend to remember big, random events – special cause risks – and often over-correct by implementing new processes or checklists to manage an event that is unlikely to happen again. However, the bigger risk may lie in the everyday inefficiencies that are accepted as normal.
The opportunity of common cause risks
The good news is that common cause risks also present a significant opportunity on your project – simply because managing common cause risks involves looking at the broader process and identifying areas where improvements can be made.
For example, if a project frequently encounters delays due to inefficient approval processes, it may be necessary to streamline the approval workflow, or empower project managers with greater decision-making authority, or factor extra time for completion into your workflows.
Bringing it back to the world of process improvement, the goal here is to reduce the overall variation in project performance by addressing the root causes of these recurring issues.
Thinking differently about risk
Risk management is a significant part of managing your project successfully. In fact, it can be the critical difference between the success and failure of your project.
Of critical importance, don’t neglect to mitigate your common cause risks, in favour of large, unexpected (and unlikely) events. Both types of risk exist in projects and require a different approach to evaluate, mitigate, or accept what level of risk is appropriate to an outcome.
In the world of project management, it always pays to be aware of – and plan for – both.