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Mayhem on Madison (A) Risk Management
Priya Prasad
BUS 519 Project Risk Management
Dr. Gregory Hart
Strayer University
October 24, 2010
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Abstract
As defined in Hillson & Simon (2007, p.23), any uncertainty that, if it occurs,
would have a positive or negative effect on achievement of one or more objectives.
Objectives have to be clearly identified for a project in a Project Charter or Statement of
Work so that threats and opportunities can be identified.
In this paper, I will be analyzing the case of mayhem on Madison (A) where a
New York based property developer Tamarkin Co. faces strong opposition from
members of the Carnegie Hill community against Tamarkins proposal to construct a
mixed-use development (i.e.) a 17 story condo building over an existing Citibank
building in the Historic District and the route they should consider when their proposal
finally gets shut down by a local regulatory agency.
They were faced with several issues such as:
Strong opposition from Citi Neighbors which had popular entertainers
such as Woody Allen, Kevin Kline etcas its members.
Need to submit their proposal to Landmark Commission for approval,
which will determine what can actually be built.
Disgruntled neighbors who do not want the proposed development due to
their concerns such as insufficient light in the area, they felt that the high
rise building would not allow adequate light to the neighboring buildings.
This paper will analyze the potential steps that the developer could have considered as
part of the Risk Management Process which would have helped them communicate better
with the local community, in turn gained positive response and support from the
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neighbors.
Key Stakeholders and their issues
Key stakeholders in this case study are Tamarkin Co Developer, Citibank Owner, Citi
Neighbors Community Residents and Landmark Commission Regulatory Agency.
A key component to any risk management project is to identify, define and assess
organization culture. It is important to develop a good understanding of the underlying
motivations and assumptions that drive the organization you are working with or for. As
stated in Gray & Larson (2008), Organizational culture is the underlying beliefs, values
and assumptions that inform and shape an organization.
In this case, the organization Tamarkin Co. was driven to construct the mixed-use
development despite all opposition. This indicates that the organization is focused on its
objective (i.e.) develop the property with Citibank who also did not back out despite the
opposition. This also shows the lack of interest the organization has in the community,
they chose to ignore the concerns of the neighbors and did not do enough to communicate
with them.
Tamarkin Cos organizational culture appears to be a market type of culture where they
understand the ROI behind developing the project with Citibank which is the primary
reason for them to push the project. As stated in the case study, The size of the lot, 68 x
68 feet, had a floor area ratio (FAR) of 10, meaning that Tamarkin Co. could erect a
building with 10 times the area of the site, or nine new stories above the existing bank
branch, this indicates the value behind the project.
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Key issues of Stakeholders:
Tamarkin Co. A local developer who is very interested in building the mixed-use
development and as Bill Coleman states We felt the building was highly appropriate to
the site. This indicates that the organizations commitment to the objective.
Citibank Property Owner, who know that the space is prime since the branch was
profitable and there was no other location the branch could be shifted to had very limited
flexibility as the bank needed to stay open during construction but also understood the
value behind the project if completed successfully.
Citi Neighbors Residents of the community who are against the project as they see no
added value. The consisted group of influential people from the entertainment world such
as Woody Allen, Kevin Kline, Bette Midler, and Paul Newman as well as prominent
executives such as Sonys Howard Stringer and food entrepreneur Eli Zabar which
complicated the issue further.
Landmark Commission the regulatory authority responsible for approving
renovations to any building located within the Historic District and they voted against
Tamarkins proposal to build a 17 story residential tower after seeing strong opposition
from the community.
Potential sources of risk for the project:
There are several sources of risk for the project and they are as follows:
Bill Coleman Though he was a local resident of the community, it did not help as he
spoke prematurely about the project hoping for a positive outcome but it turned out to be
negative. He should have waited till all the details were worked out and then spoken with
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the community.
Strong presence of celebrities in the neighborhood Celebrities have the potential to
rally a large crowd against a project which will make the developer and his proposal look
bad in front of the media and public agencies.
Dollars spent in vain Tamarkin Co had to hire an architect, a Historic Preservation
specialist and a Lawyer to ensure that their final presentation to Landmark Commission is
upto par, but they spent all the dollars not knowing or not having a strong sense if the
project will be approved or rejected.
Bad Rapport for the organization Tamarkin Co faced strong opposition from the
members of the community and their unwillingness to listen to their concerns left a bad
impression in the minds of the community residents which may be fatal for future
projects.
Initiation Step in ATOM and its Benefits:
As stated in The Presidential/Congressional Commission on Risk Assessment and Risk
Management, 1997, A good risk management decision emerges from a decision-making
process that elicits the views of those affected by the decision, so that differing technical
assessments, public values, knowledge, and perceptions are considered.
As stated in Hillson & Simon (2007), the purpose of the initiation process is to:
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Clarify which stakeholders should set the parameters of the risk process.
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Decide on the appropriate level of risk for the project.
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Define the scope and objectives of the risk process.
Initiation activities such as Project Sizing and Initiation Meeting can happen after the
project has been approved but Stakeholder Analysis would play an important part in this
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project as Tamarkin Co. could have used this analysis to figure out which stake holders
needed to be involved so that the projects objectives could have been shared with them.
Input from prime Stakeholders such as Citi Neighbors and prominent celebrities during
the Design Phase would have kept opposition down to a minimum and also helped with
approval process with Landmark Commission.
Neglecting key stakeholders concerns such as lack of adequate lighting and also not
involving them during the Design Process introduced the project to them as a surprise
which was not anticipated and the community did not feel that they were a part of the
decision making process.
Stakeholder involvement would have turned Saboteurs into Saviors for the project. It is
vitally important to understand the basic concepts of risk communication and to ensure
that communication among stakeholders is integral to the risk management process.
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References
Internet Resources
Mayhem on Madison (A) by David Lane, A. Eugene Kohn, Jan 09, 2008 Retrieved on
Oct 24, 2010 at http://hbr.org/product/mayhem-on-madison-a/an/208067-PDF-ENG?
Ntt=mayhem%2520in%2520madiosn
Book Resources
Practical project risk management: The ATOM methodology by Hillson, D, & Simon, P.
(2007) Management Concepts, Vienna, VA
Project Management The managerial process by Gray, Clifford F and Larson, Erik W,
Copyright 2008 by The McGraw-Hill Companies, Inc.