There are happy and sad cases of projects that take off and those that would never see the light of day. You know the successful cases: their inauguration rites are flashed on television and find themselves on choice pages of newspapers.
And, soon enough, these projects would begin doing the business they know best – churn out products or provide public services.
Projects that fail. It is not so with projects that failed. They also hit the headlines alright, but these are photos of protesters brandishing placards in a barricade, news on legislators summoning project officials in a congressional hearing and, worse, a banner story of court of law or a regulatory agency ordering the project suspended!
Meanwhile, all forecasts of revenue go hay wire, and shareholders are shocked by the impunity by which government executives, proving the Shakespearean lament on the “insolence of office,” abuse their discretion.
Project proponents, particularly the multinational partners, usually have two choices: one, pack their bags and try friendlier host countries or, two, seek redress from an international court where justice, alas, also grinds so slowly.
The third way. There is a third alternative. They should wise up to the situation and deal with something they at first failed to do: use corrective measures, come to grips with political realities locally and nationally. More specifically, they must, this time, include “political risks” in their risk assessment.
Let’s face it. Engineers and construction experts may build an engineering marvel, harness the best project management methods, complete the project on schedule and within budget, go through scientifically tested simulation exercises, even perfect technical information dissemination among themselves – and yet the projects are delayed or mothballed because they are met with great resistance by people.
We are not lacking at all in books and journals on project management and risk assessment. But, a cursory reading of such books and investigation of other data bank shows a very limited appreciation of the crucial importance of reaching out to the community, listening to their hopes, identifying with their aspirations.
Political risks cannot be ignored. Often, project managers realize a little too late that beyond technical, financial, construction and other risks are the more unpredictable but very important “political risks.”
Helga Odden Resknes of Norway, in a speech before risk managers, cited the need to “establish binding contact between social sciences and natural sciences in order to create the best possible platform for risk communication.”
She meant that real communication must complement the comfort zones of engineers. “A project is never without risks,” said Daniela Van Well-Stam, co-author of “Project Risk Management,” adding that “performing risk analysis and management is actually necessary to maintain control over a project.”
Engineering precision and predictive techniques must be accompanied by honest-to-goodness stakeholder communications, and thus come to grips with community, political – even regulatory – risks.
Communities predisposed to support. Host communities – and even the usual suspects that make it difficult to put up a plant or establish a tollway – do not actually want to squander valuable time opposing worthwhile projects. After all, they would benefit more from a project that creates jobs, brings forth allied industries, and promises a much-delayed prosperity in the area.
Project managers who turn a “blind eye” to and dismiss political risks as a needless distraction to their perfect engineering marvel will get a surprise of their lives. But, if you heed these project risk analysts and spend time on “people issues,” the usual distraction of engineers, your efforts would be rewarded by the community folk themselves, choosing pro-existence or, at the very least, co-existence.
So, the next time you are called upon to do a project, or a friend tells you about his dream infrastructure, advise him to do some environmental scanning in the area, do some thinking out of the “engineering box” – and deal with people issues in the area. Who knows, when his project succeeds, he may reward you with a fat contract – or, at the very least, a steaming hot coffee! (dantemvelasco@yahoo.com)
Tuesday, February 28, 2006
Friday, February 17, 2006
POLITICAL RISKS Handling a project’s blind spot
NOTHING ELSE IS NEW. PROJECT PROPONENTS and managers – after putting up an industrial plant, inaugurating a mining site, or erecting a cement plant – are usually shocked by the consequent hostility of host communities.
A power plant in Mindanao, a few years ago, was about complete and turbines were just about to crank out electricity, but other important installations could not be delivered to the site because the roads were blocked by protestors lying in the middle of the road.
A mining site could not start operations due to an implacable resistance by the community, raising environmental concerns. A changing of the guards was hastily made for a new tack, but even the local church prelate remains unconvinced.
A cement plant in the north did not see the light of day due to the vigorous opposition of local residents, confronting the project proponents with serious environmental issues that remained unanswered to this day.
The good news is, the power plant in Mindanao has long begun operations, due to a belated realization that there was a “political” crisis in the community, and then officials staged a successful stakeholder communication effort.
It addressed concerns on the possible pollutions of rivers and risks on health, and reached out to the leaders in the area at all levels of decision-making, from the barangay chairman to the governor.
The protesters were not won over completely, but a mechanism of “critical collaborations” was agreed on. Thus, plant authorities to this day are always on their toes anytime the multi-sectoral monitoring group calls their attention to a possible health or environmental risk.
The mining project continues to be hobbled by a lack of genuine communication effort, but hopes are high that the entry of a high profile executive, known for his commitment to the environment, might yet resolve the impasse.
Engineering marvel is not enough. There must be a gap somewhere. And most project managers have a “blind spot” in the area of “political risks,” which can be addressed by a wide-ranging and well-informed “stakeholder communications” program. This program proceeds from the concept that host communities, among many others, are “stakeholders” of a project.
Engineers and construction experts may build an engineering marvel, harness the best project management methods, complete the project on schedule and within budget, go through scientifically tested simulations exercises, even perfect technical information dissemination among themselves (which they call “communication” in a severely limited way) – yet the projects are delayed or moth-balled because they were met with great resistance by people.
In a study I’m making, I found out that we are not lacking at all in books and journals on project management and risk assessment. But, a cursory reading of such books and investigation of other data bank shows a very limited appreciation of the crucial importance of reaching out to the community, listening to their hopes and fears.
If the project handlers do this, they will invariably find a common ground and thus achieve “co-existence,” at the very least, or “mutual trust,” at best.
Mitigating or eliminating risks. Project managers, deep into engineering disciplines, may understandably gloss over the importance of “human communication” in their risk assessment exercises. Often, they realize a little too late that beyond technical, financial, construction and other risks are the more unpredictable but very important “political risks.”
Jose P. de Jesus, president of the Manila North Tollways Corporation (MNTC) and formerly Public Works and Highways Secretary, zeroed in on “political risks” as the proverbial hard nut to crack.
In a speech before the Management Association of the Philippines, the MNTC chief pointed out that political risks “confront every major project in terms of changes in the political dispensation, community resistance, legislative inquiries, and organized opposition by civil society.”
De Jesus added that a “proactive and comprehensive public information program, government liaison and communication efforts can mitigate these risks.”
A risk management expert, Helga Odden Resknes of Norway, refers to these political risks in a more academic way. In a presentation she made before project risks managers, she emphasized the need to “establish binding contact between social science and natural science in order to create the best possible platform for risk communication.”
Go for a shared future. She meant that real communication in the realm of the social sciences must complement the comfort zones of the engineering discipline mostly grounded ion the physical sciences. If you think this sounds “too academic,” just bear in mind that considering the human and social factors might yet save your project or add an important element to your risk assessment.
“A project is never without risks,” said Daniela Van Well-Stam, co-author of “Project Risk Management ,” published by Kogan Page, adding that “performing risk analysis and management is actually necessary to maintain control over a project.” Other books refer to such analysis as “uncertainty analysis.”
Ahead of every project manager be it an industrial plant, the Olympics, a space shuttle project, an IT prototype or even a corporate anniversary celebration is an uncertainty in varying degrees of severity and likelihood.
The lesson learned is this: Engineering precision and predictive techniques must be complemented by a program on coming to grips with community, political even regulatory risks. When you do your homework, as proponents of some successful projects did, you can actually mitigate or completely eliminate the risks.
After all, even host communities would prefer to spend their time co-existing with a structure that promises them a brighter common future than to waste valuable time on the sidelines with screaming placards in opposition to an otherwise good project that has been poorly communicated.
Project managers who turn a “blind eye” to and dismiss political risks as a needless distraction to their perfect engineering marvel will get a surprise of their lives. But, if you heed the words of experienced project risk analysts and take to heart the wise counsel of veteran Ping de Jesus of flyover and NLEX fame, you will be glad you did.
A power plant in Mindanao, a few years ago, was about complete and turbines were just about to crank out electricity, but other important installations could not be delivered to the site because the roads were blocked by protestors lying in the middle of the road.
A mining site could not start operations due to an implacable resistance by the community, raising environmental concerns. A changing of the guards was hastily made for a new tack, but even the local church prelate remains unconvinced.
A cement plant in the north did not see the light of day due to the vigorous opposition of local residents, confronting the project proponents with serious environmental issues that remained unanswered to this day.
The good news is, the power plant in Mindanao has long begun operations, due to a belated realization that there was a “political” crisis in the community, and then officials staged a successful stakeholder communication effort.
It addressed concerns on the possible pollutions of rivers and risks on health, and reached out to the leaders in the area at all levels of decision-making, from the barangay chairman to the governor.
The protesters were not won over completely, but a mechanism of “critical collaborations” was agreed on. Thus, plant authorities to this day are always on their toes anytime the multi-sectoral monitoring group calls their attention to a possible health or environmental risk.
The mining project continues to be hobbled by a lack of genuine communication effort, but hopes are high that the entry of a high profile executive, known for his commitment to the environment, might yet resolve the impasse.
Engineering marvel is not enough. There must be a gap somewhere. And most project managers have a “blind spot” in the area of “political risks,” which can be addressed by a wide-ranging and well-informed “stakeholder communications” program. This program proceeds from the concept that host communities, among many others, are “stakeholders” of a project.
Engineers and construction experts may build an engineering marvel, harness the best project management methods, complete the project on schedule and within budget, go through scientifically tested simulations exercises, even perfect technical information dissemination among themselves (which they call “communication” in a severely limited way) – yet the projects are delayed or moth-balled because they were met with great resistance by people.
In a study I’m making, I found out that we are not lacking at all in books and journals on project management and risk assessment. But, a cursory reading of such books and investigation of other data bank shows a very limited appreciation of the crucial importance of reaching out to the community, listening to their hopes and fears.
If the project handlers do this, they will invariably find a common ground and thus achieve “co-existence,” at the very least, or “mutual trust,” at best.
Mitigating or eliminating risks. Project managers, deep into engineering disciplines, may understandably gloss over the importance of “human communication” in their risk assessment exercises. Often, they realize a little too late that beyond technical, financial, construction and other risks are the more unpredictable but very important “political risks.”
Jose P. de Jesus, president of the Manila North Tollways Corporation (MNTC) and formerly Public Works and Highways Secretary, zeroed in on “political risks” as the proverbial hard nut to crack.
In a speech before the Management Association of the Philippines, the MNTC chief pointed out that political risks “confront every major project in terms of changes in the political dispensation, community resistance, legislative inquiries, and organized opposition by civil society.”
De Jesus added that a “proactive and comprehensive public information program, government liaison and communication efforts can mitigate these risks.”
A risk management expert, Helga Odden Resknes of Norway, refers to these political risks in a more academic way. In a presentation she made before project risks managers, she emphasized the need to “establish binding contact between social science and natural science in order to create the best possible platform for risk communication.”
Go for a shared future. She meant that real communication in the realm of the social sciences must complement the comfort zones of the engineering discipline mostly grounded ion the physical sciences. If you think this sounds “too academic,” just bear in mind that considering the human and social factors might yet save your project or add an important element to your risk assessment.
“A project is never without risks,” said Daniela Van Well-Stam, co-author of “Project Risk Management ,” published by Kogan Page, adding that “performing risk analysis and management is actually necessary to maintain control over a project.” Other books refer to such analysis as “uncertainty analysis.”
Ahead of every project manager be it an industrial plant, the Olympics, a space shuttle project, an IT prototype or even a corporate anniversary celebration is an uncertainty in varying degrees of severity and likelihood.
The lesson learned is this: Engineering precision and predictive techniques must be complemented by a program on coming to grips with community, political even regulatory risks. When you do your homework, as proponents of some successful projects did, you can actually mitigate or completely eliminate the risks.
After all, even host communities would prefer to spend their time co-existing with a structure that promises them a brighter common future than to waste valuable time on the sidelines with screaming placards in opposition to an otherwise good project that has been poorly communicated.
Project managers who turn a “blind eye” to and dismiss political risks as a needless distraction to their perfect engineering marvel will get a surprise of their lives. But, if you heed the words of experienced project risk analysts and take to heart the wise counsel of veteran Ping de Jesus of flyover and NLEX fame, you will be glad you did.
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