The benefits of risk management are vast, yet for many projects, this is an area still commonly overlooked. By applying simple and consistent risk management techniques we can easily minimize the impact of potential threats as well as leverage potential opportunities. This not only ensures meeting the agreed scope, cost and time but also improves the overall health and efficiency of the project operation, team members, and wider stakeholders. This article comes back to the basics of the key rules of managing risk, to ensure your projects are consistently delivered with full success.
Tip #1 – Implement a solid identification process
Sounds simple right. However, there are still many projects today that are managed with absolutely no formal risk identification incorporated. Then there are others that think they are using risk management appropriately but are not applying the correct techniques to identify risks. The identification process will depend on the project, the organization, and the company culture involved. So it is best to consider those areas when determining the most effective approach. This could be as simple as educating the team on what a risk actually is and asking them periodically to review the landscape for new risks. Or for large projects, the PMO can be leveraged to ensure risk identification is included in the drumbeat.
Tip #2 – Be positive
Risk management includes identifying and managing both negative risks and positive ones, yet most projects typically seem to focus only on the negative ones. Ensure to add clear reminders and pointers within your risk management process to consider positive risks. A deliverable being delivered well before its due date can be a good thing, but also can have unforeseen impacts on other areas or leave the project operating inefficiently. On the other hand, such a positive risk can actually help to balance out the impact of negative risks in other areas.
Tip #3 – Prioritise for efficiency
All risks are not equal and there are always limitations around how many resources can be applied to mitigate them. As such it is essential to classify risks in terms of ‘probability’ or how likely the risk is to occur and ‘impact’ level if the risk materializes into an issue. By doing so will allow the project manager and all team members to easily see which risks are a priority to focus on. The use of a risk register template is a very effective means of doing so. Most organizations would have a standard template for this or if not there are many that can be found online.
Tip #4 – Apply for correct ownership
It is often common for people within the project organization to assume that the project manager owns all risks but this is completely false. Risks can affect wide areas of the wider stakeholder group and it is typical that resources with the relevant knowledge or skills in that area are much better placed to become the owner of the risk and to carry out the appropriate mitigation actions.
Tip #5 – Communicate and track to closure
With correct identification, classification, and owner allocation in place, we need to be careful as project managers that this is not considered to be the final step in the process of risk management. At this stage, it is critical that the risks are correctly communicated. Firstly to the owner assigned to manage the mitigation actions and secondly to the wider stakeholder group affected so they are aware of the risk and potential impact to their respective areas. It is also then essential that the risks are regularly monitored and tracked through to closure regarding progress on mitigation actions and potentially changes to the impact/probability classifications as those actions come to fruition.
By following the above tips, project managers will be well placed to be in a position of control in relation to the management of risks for their projects and ultimately this will ensure a sound foundation for the successful delivery of their work