Tom Demarco - Waltzing with Bears Managing Risks On Software Projects.pdf - Project_Management - JohnBlack

Waltzing

with Bears

MANAGING RISK ON SOFTWARE PROJECTS

TOM DEMARCO & TIMOTHY LISTER

Acknowledgments

Many people believe that the roles of editor and publisher consist of checking spelling and

grammar and overseeing the printing process. No. We thank David McClintock, Wendy Eakin,

Vincent Au, and Nuno Andrade of Dorset House for their work taking our manuscript and molding

it, transforming it, and coaxing it into a book we two are very proud of. The "before and after

pictures" are remarkable. Thank you.

We also want to thank our colleagues who have generously jumped at the chance to give us

their opinions and insights pro bono. It is just these conversations that give us the joy of working in

our profession. Our thanks go to Rob Austin, Barry Boehm, Christine Davis, Mike Evans, Sean

Jackson, Steve McMenamin, and Mike Silves.

We especially thank Bob Charette and the late Paul Rook for trailblazing this area. Our path

has been much easier to follow thanks to them.

Finally, we thank our consulting clients of the last ten years. These are the companies that

demonstrated to us that running away from risk is a loser, and that risk comes with the territory of

a valuable project. We recognize that these people are not afraid to work on risky efforts; they

want to work on important ventures.

Authors’ note

This text is divided into five parts, each one intended to answer one of the major questions

likely to be on the mind of a new or potential risk manager:

Part I: Why bother to do risk management?

Part II: Why shouldn't we do it? (Wherein the authors come clean about some of the potential

negatives of introducing risk management into an organization that isn't quite ready

for it.)

Part III: How shall we go about it?

Part IV: How much risk should our organization be willing to take?

Part V: How do we know whether or not our risk management approach is working?

The page introducing each new part breaks down the overall question into detailed questions.

By reading the chapters in each part, you should find answers to all those

questions—or we haven't done our job.

Voice

Most of the text is written in the plural voice, with "we" standing for both authors. On

occasion, we like to get in a word or two in our individual voices, and that gives rise to paragraphs

set off like these:

TRL: Here's me (Tim) speaking in my own voice.

TDM: And this one is me (Tom).

Website

As we mention later, in Chapter 12, we've built a Website to complement the text. You'll find

it at http://www.systemsguild.com/riskology

We have placed some tools there to help your risk management effort, and we will endeavor to

keep the site updated as we learn about new risk management tools or news on the subject.

Our Title

Our title is taken from a song included in The Cat in the Hat Songbook, by Dr. Seuss. The

song tells of Uncle Terwilliger, who every Saturday night "creeps down our back stairs,/sneaks out

of our house to go waltzing with bears."

Uncle T. is a willing risk taker—we can only hope that he has a workable understanding of

risk assessment, containment, and mitigation. If so, he is a perfect model for managers of risky

software projects, people who may need to dance on occasion with a few bears of their own.

Table of contents

PROLOGUE ..................................................................................................................................... 5

Part 1 WHY ...................................................................................................................................... 7

1 RUNNING TOWARD RISK ................................................................................................... 7

2 RISK MANAGEMENT IS PROJECT MANAGEMENT FOR ADULTS ....................... 10

3 DENVER INTERNATIONAL AIRPORT RECONSIDERED.......................................... 14

4THE CASE FOR RISK MANAGEMENT ............................................................................ 17

Part II WHY NOT ......................................................................................................................... 20

5 THE CASE AGAINST RISK MANAGEMENT ................................................................. 21

6 THE ONUS OF UNCERTAINTY......................................................................................... 23

7 LUCK ....................................................................................................................................... 25

Part III HOW ................................................................................................................................. 28

8 QUANTIFYING UNCERTAINTY ....................................................................................... 28

9 MECHANICS OF RISK MANAGEMENT ......................................................................... 32

10 RISK MANAGEMENT PRESCRIPTION ........................................................................ 40

11 BACK TO BASICS............................................................................................................... 44

12 TOOLS AND PROCEDURES............................................................................................. 51

13 CORE RISKS OF SOFTWARE PROJECTS.................................................................... 58

14 A DEFINED PROCESS FOR RISK DISCOVERY .......................................................... 65

15 RISK MANAGEMENT DYNAMICS................................................................................. 69

16 INCREMENTALISM FOR RISK MITIGATION............................................................ 74

17 THE ULTIMATE RISK MITIGATION STRATEGY..................................................... 80

Part IV HOW MUCH .................................................................................................................... 82

18 VALUE QUANTIFICATION.............................................................................................. 82

19 VALUE IS UNCERTAIN, TOO.......................................................................................... 86

20 SENSITIVITY ANALYSIS ................................................................................................. 89

21 VALUE OFFSETS RISK ..................................................................................................... 91

22 REFINING THE RISK MANAGEMENT PRESCRIPTION.......................................... 93

Part V WHETHER OR NOT ....................................................................................................... 95

23 TEST FOR RISK MANAGEMENT................................................................................... 95

APPENDIX A ................................................................................................................................. 97

APPENDIX B ............................................................................................................................... 101

REFERENCES ............................................................................................................................. 102

PROLOGUE

THE ETHICS OF BELIEF

London, April 11, 1876: The scene is Grosvenor Square, just before 10 P . M . Around us, on the

sidewalks of the square, Victorian gentlemen, many in top hats and evening clothes, are making

their way toward the ornate entrance of the Grosvenor Hotel. We follow them in and are guided

toward the upstairs parlor, where the monthly meeting of London's elite Metaphysical

Society is to take place.

The Society's members include Alfred Tennyson, William Gladstone, Thomas Huxley,

Cardinal Manning, Arthur James Balfour ... in short, the cream of London intelligentsia. The sub-

ject this evening is, as always, philosophy. Before the proceedings begin, the participants are

talking in small groups, picking up threads of the last meeting's discussion. As we wander among

these clusters, we hear such terms as ontology, tautology, and epistemology. Some of the

discussions are heated.

There is a certain tension in the room this evening, due to the selection of the meeting's

featured speaker. He is the Society's newest member, William Kingdon Clifford. Clifford is a

professor of logic and mathematics at London's University College. He is considered an

iconoclast, possibly an atheist, and is known to be a fiery debater. With his selection, he has

become the youngest person ever accepted into the Society.

By convention, each new member must prepare a paper and read it to the membership at his

first meeting. Only the title of Clifford's paper, "The Ethics of Belief," has been made public, not

the paper's contents. It promises to be a stunner.

Indeed, before Clifford has even finished reading, half the room has stomped out in angry

protest. The Society's Secretary has publicly resigned; it would have been his job to arrange a private

printing of the paper, and this he has refused to do. The remaining members are on their feet, either

cheering Clifford on or trying to shout him down. The temperature in the room has shot up markedly

and the entire scene is, well, a bit un-British.

What was it about "The Ethics of Belief that got the members so hot? In the essay, Clifford asserts

that what you choose to believe ought not to be exempt from the ethical judgment of others. Your

belief may open you to a charge of unethical behavior, depending on whether, in Clifford's words,

you have "a right to believe" the thing that you believe. 1

He offers as an example the owner of an emigrant ship that is about to set sail with a full

complement of passengers. The owner is bothered by worries that the ship is old and in poor condition

and wasn't built very well in the first place. There is a real question in his mind about whether it can

safely make another passage. With a bit of effort, though, the shipowner overcomes his doubts and

persuades himself that no great harm will come from just one more passage. The ship, after all, has

weathered more than a few storms in its day and always managed to limp home to port. Why not one

more time?

The ship puts to sea and is lost with all hands.

"What shall we say of the owner?" Clifford asks, and gives his own answer:

Surely this, that he was verily guilty of the death of those men. It is admitted that he

did sincerely believe in the soundness of his ship; but the sincerity of his conviction can

in no wise help him, because he had no right to believe on such evidence as was before

him. He had acquired his belief not by honestly earning it in patient investigation, but

by stifling his doubts. And although in the end he may have felt so sure about it that he

could not think otherwise, yet inasmuch as he had knowingly and willingly worked

himself into that frame of mind, he must be held responsible for it.

1 See Appendix A for Part 1 of "The Ethics of Belief."

Tom Demarco - Waltzing with Bears Managing Risks On Software Projects.pdf

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