1st Edition

Risk Monetization
Converting Threats and Opportunities into Impact on Project Value





ISBN 9781138113916
Published June 14, 2017 by Chapman and Hall/CRC
328 Pages 36 B/W Illustrations

USD $86.95

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Book Description

Risk Monetization: Converting Threats and Opportunities into Impact on Project Value addresses the organizational, political, cultural, and technical issues related to implementing a successful risk assessment, management, and monetization process. Suitable for readers in any organization or area of expertise, the book assumes no prior background in risk assessment, management, or monetization.

With more than three decades of experience in risk-process implementation, the author first explains the benefits of the risk-monetization process and how risk matters are generally not handled properly in contemporary organizations. He then introduces the terms and definitions essential to making risk monetization successful in a project. The text goes on to give examples of risk-monetization techniques applied in a variety of settings before discussing the typical risk situation for most projects and the shortcomings of conventional processes. It also describes how risk identification, assessment, management, and monetization processes are set up in an ideal environment as well as in imperfect situations. The final chapter focuses on how investment decisions are made based on the monetization and ranking of risks.

Enhancing your project’s value, this book offers step-by-step practical guidance on identifying, assessing, managing, and monetizing both threats and opportunities so that risk impedes the bottom line as little as possible. It shows you how to convert probable risks into positive impacts on the chance of success and/or profitability of any project.

Table of Contents

What’s the Point?
Skipping the Fundamentals for Now
Some Acronyms
A Focus on Success and Value—Not on Reducing Uncertainty
Many Contributing Disciplines
Many Views of Risk
An Aim to Integrate Risks
Surprise! Integrated Impact Is Almost Always Alarming
Where We Would Like to Be

How Risk Information Traditionally Is Handled—The Good, the Bad, and the Ugly
Risk Registers and Their Many Implications

The Fundamentals
Decide for Whom You Are (Really) Working
Be Clear as to "What Is the Question?"
Be Certain of the Right Level of Support
What I Assume
Some Definitions

Spectrum of Application for Monetization
Acquisitions
Divestitures
Environmental Projects
Health and Safety
Risk Monetization of Legal Matters
Other Project Types

Without Risk Monetization, What Typically Is Done
Project Envisioned
Incomplete Representation
Don’t Tell Me What to Do!
Poor Translation of Qualitative Data into Quantitative Data
One, Two, Three—Go!
Little or No Risk Integration
Use of the "Boston Square"
Data Gathered from Those with Vested Interest
Faulty Forecasts
Lack of Organization
Mitigation of Threats
Initial Budget Estimates
Initial Schedule Estimates
Sensitivity
Risk Interpreted as Uncertainty
Poor Risk Communication
Piecemeal Presentations
Determining the Reduction in Probability and/or Impact
Not a Consistent Deciding Body
Rewarding Activity

One Route to Risk Monetization—The "Perfect World" or "High Control" Path
Try to Be Unfashionably Early
Appoint a Risk-Process Proponent
Have "The Talk"
Don’t Underestimate the Upheaval
Decide How Sensitive "Soft" Risks Will Be Handled
Have the Conversation about Risk Acceptance
Determine What Has Already Been Done and Establish Rapport
Establish a High-Level Story about Why This Is Being Done
Design a Risk-Monetization Process That Fits with the Existing Culture and Workflows
Establish That There Will Be Only "One" Risk Register
Prepare for Risk-Identification Workshop (RIW)
Opening the RIW
Start Identifying Risks
Assessing, Valuing, and Ranking Risks Prior to Monetization
Mitigation/Capture Actions
Some Post-RIW Activities
Implement Sustaining Actions

Another Route to Risk Monetization—The "Already in Progress" or "Imperfect World of Low Control" Path
Some of the "Perfect World" Stuff Applies
"Risk Analyses" Already Done

Risk Monetization
A Warning and Justification for Monetization
Setting the Stage
The Monetization Process

Appendix: Summary of the Journey from Risk Assessment to Monetization and More

Selected Readings appear at the end of each chapter.

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Author(s)

Biography

Glenn R. Koller is a risk advisor at a major corporation. In 2008, he retired after 30 years as the head of the Major Project Risk Group at a major energy company. He holds two international patents on statistical routines and earned his Ph.D. in geochemistry/geophysics from Syracuse University. Dr. Koller’s research interests include all aspects of risk and uncertainty analysis, management, monetization, and training.