The benefits of risk management are huge, but for many projects this is an area still commonly overlooked. By making use of simple and constant risk management methods we can easily minimise the impact of potential threats as well as leverage potential opportunities. This not only ensures meeting the agreed scope, price and time but also improves the general health and effectivity of the project operation, crew members and wider stakeholders. This article comes back to the fundamentals on the key rules of managing risk, to make sure your projects are persistently delivered with full success.
Tip 1 – Implement a solid identification process
Sounds simple right. Nevertheless there are still many projects today which are managed with completely no formal risk identification incorporated. Then there are others that think they are utilizing risk management appropriately however are usually not making use of the proper methods to establish risks. The identification process will rely upon the project, the organisation and the corporate tradition involved. So it is best to consider these areas when figuring out the most effective approach. This might be so simple as educating the crew on what a risk truly is and asking them periodically to evaluate the landscape for new risks. Or for giant projects the PMO will be leveraged to make sure risk identification is included in the drumbeat.
Tip 2 – Be positive
Risk administration includes figuring out and managing both negative risks and positive ones, yet most projects typically seem to focus only on the negative ones. Guarantee to add clear reminders and pointers within your risk management process to consider positive risks. A deliverable being delivered well before its due date generally is a good thing, but in addition can have unexpected impacts on different areas or leave the project operating inefficiently. Alternatively such a positive risk can really help to balance out the impact of negative risks in other areas.
Tip three – Prioritise for effectivity
All risks should not equal and there may be always limitations around how much resource will be utilized to mitigate them. As such it is essential to categorise risks by way of ‘probability’ or how likely the risk is to happen and ‘impact’ level if the risk materialises into an issue. By doing so will permit the project manager and all group members to easily see which risks are priority to focus on. Use of a risk register template is a very efficient means of doing so. Most organisations would have a regular template for this or if not there are various that may be found online.
Tip four – Apply right ownership
It’s typically common for folks within the project organisation to imagine that the project manager owns all risks however this is totally 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 a lot better placed to become the owner of the risk and to hold out the appropriate mitigation actions.
Tip 5 – Talk and track to closure
With correct identification, classification and owner allocation in place we have to be careful as project managers that this isn’t considered to be the ultimate step within 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’re aware of the risk and potential impact to their respective areas. It’s also then essential that the risks are commonly monitored and tracked through to closure relating to progress on mitigation actions and potentially modifications to the impact / probability classifications as these actions come to fruition.
Summary
By following the above ideas, project managers will be well positioned to be in a position of management in relation to the management of risks for their projects and in the end this will guarantee a sound basis for the successful delivery of their work
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