Five, Not Four

Although I agree with Max's insistence on quality as a critical fourth factor, I believe that his model still leaves something to be desired. When thinking about a project prior to beginning work on it, management is typically interested in the "shape" of the projectan interest that maps nicely to the four parameters illustrated in Figures 9.1 and 9.2. That is, we can state how much we intend to do (scope); we can describe how well we are going to do it (quality); we can predict how long we will take to complete the project (time); and we can estimate how much it will cost (resources). But then are we done with our project description?

I don't think so. Management is always interested in a fifth variable: risk. That is, given the previous four parameters we've identified and the plan that goes with them, management wants to know whether the project represents a high, medium, or low risk to the business. We know from vast experience that projects have different risk profiles, and good managers try to balance their project portfolios by planning a spectrum of projects with different risk levels. The more risky ones have a greater probability of failure, but they might have bigger payoffs, too. Just as it is judicious for individuals to have diversified financial investment portfolios, it is smart for a company to diversify its portfolio by having many projects with different risk/reward profiles. Statistically, such an enterprise is bound to prosper.

Now, how can I use geometry to visualize this new, important, andI believefinal, parameter?