Tips for success in project risk management
The benefits of risk management are significant, yet this is a field that is still widely ignored for many projects. We can effectively minimize the impact of potential threats and maximize potential opportunities by applying simple and consistent risk management techniques. This not only ensures that the agreed scope, cost and time are met, but also improves overall project operation health and efficiency, team members, and wider stakeholders. This article returns to the fundamentals of key risk management rules to ensure that your projects are executed reliably with complete success.
Tip #1: Implementation of a solid identification process
However, many projects are still being managed today with absolutely no formal identification of risks being incorporated. And there are others who believe they use risk management correctly but do not use the right techniques to define risks. The method of identification would depend on the task involved, the agency involved and the corporate culture. Thus, when determining the most effective approach, it is best to consider these areas. This could be as easy as educating the team about what a risk is and encouraging them to review the landscape for potential threats on a regular basis. Or the PMO can be leveraged for large projects to ensure that the drumbeat involves threat recognition.
Tip # 2 — Being Positive
Risk management requires both defining and handling negative and positive risks, but most projects tend to focus only on the negative ones. Ensure that consistent reminders and tips are added to identify positive risks within the risk management system. It can be a good thing to have a deliverable delivered well before its due date, but it can also have unintended effects on other areas and make the project inefficient.
Tip #3 — Prioritise for efficiency
It is essential to classify risks in terms of the likelihood of the risk occurring or ‘probability’ and the level of ‘impact’ if it becomes a problem. This is because all risks are not equal and there are constraints on how much resource can be used to mitigate them. By doing so, the project manager and all team members will be able to see quickly which risks to concentrate on. Using a model for a threat registry is a very effective way to do this. For this, most organizations would have a standard template or if not, many can be found online.
Tip #4 — Applying proper ownership
Many people within the project organisation believe that the project manager bears all the risks, but that’s completely wrong. The wider stakeholder group can be affected by risks, and it is typical that resources with relevant skills or knowledge in this area are much better placed to become the risk owner and perform appropriate mitigation actions.
Tip #5— Communicate and monitor till closure
With proper owner allocation, classification and identification in place, we need to be cautious as project managers that this is not assumed to be the final step in the risk management process. It is important at this point to properly communicate the risks. Firstly, the owner appointed to oversee the mitigation activities and, secondly, the wider group of stakeholders impacted so that they are aware of the risk and potential impact on their areas. It is then important that the risks are continuously monitored and followed through to closure in terms of progress on mitigation measures and potential changes in impact / probability classifications as these actions come to fruition.
By implementing these tips, you as a project manager will be well prepared to be in a position of power with regard to risk management for their projects and will effectively provide a sound basis for the good performance of their work.