Risk Management Dont Ignore the Risks

Risk Management: Don’t Ignore the Risks

Risk is an integral part of project management. Any new creation generates uncertainties and gray areas. Every project has its own unique share of risk; yet, sometimes project management professionals struggle to allocate sufficient time or effort to properly address the unique risks of their projects. It is perilous to ignore risks. Whether upstream or downstream, risks are there. They must be found and addressed early in order to help ensure project success.

To avoid being overwhelmed by unaddressed risk, here are some basic and simple steps to follow as you approach a project.

1. Understand Different Forms of Risk

  • Risks specific to project management: unrealistic objectives, a lack of budget, socio-political or economic risk of the country
  • Risks concerning planning: inappropriate deadlines
  • Human risks: poor communication, poor distribution of tasks according to everyone’s skills, lack of quality control
  • Technical risks: no access to the required technologies, complexity of the project, lack of means

This is only a brief list. It would be worthwhile to collaborate with your teams on the many different risks you’ve encountered professionally. The more varied your positions and skills, the better. There will be more ideas and less chance of forgetting an important area where risk may arise.

Once you’ve collaborated with your team, the question “How should we anticipate risks for our project?” may arise. There is no step-by-step, miracle solution to anticipating and addressing the unique risks that may emerge on any given project. However, a list of risks will allow a team the opportunity to begin assessing the variety of negative, unexpected circumstances that could emerge on their projects.

2. Classify the Risks in Your List

  • Consider the likelihood of a risk’s occurrence
  • Consider the extent of the damages if the risk occurs
  • Weigh the overall cost and benefits associated with its solution
  • Give a note to each potential risk. This will give your team a better overview of your project’s risk profile.

3. Determine the Best Strategy

  • You can accept a risk if you feel that it is not serious enough, not important enough to modify the project, or that the risk of it happening is low.
  • You can modify the project from the start to limit a risk or avoid it completely.
  • You can build an emergency plan for the highest risks. The goal here is to find alternatives to specific tasks and roles affected by the risk.
  • You can take out insurance.
  • You can decide to address limited risks as they arise during the lifecycle of your project.

4. Adopt Practical Solutions

  • Train your teams on the project. They must know the details of your risk management plan.
  • Make sure that all the skills you will need to mitigate risk are on your teams to begin with.
  • Get your whole team involved in risk management. Confidence and motivation are key elements for good project and risk management.
  • Whenever possible, ensure that each member is versatile in several topics. The project must always be able to continue without interruption, should a team member leave for whatever reason.
  • Designate a responsible person, according to their unique skills, for all anticipated risks. They should analyze, monitor, and write reports containing as much information as possible on their risks.

5. Stay Agile, Flexible, and Adaptive

A project is constantly evolving, as is the list of your risks, so constantly reassess the risks one by one and adapt the actions to be put in place to best anticipate the problems. Again, always work as a team. Everyone will then be able to assess the progress of the project and the associated risks, the actions that have been implemented, and the closure of the risks.

Do not forget that each action implemented to avoid a risk can generate another risk!

6. Conclusion

Please enjoy Master Yoda’s “Risk Ten Commandments” to summarize this discussion.

  1. Risk and uncertainty you will recognize
  2. Infallible you will not believe yourself
  3. To the problem posed, your methods you will adapt
  4. Between prevention and cure you will choose
  5. Over time you will recover
  6. To manage the risk you will train yourself
  7. With each partner of the project your information you will share
  8. At each risk a manager you will allocate
  9. Anticipate and react effectively you will know
  10. From experience you will learn

By: Vice President Pactrice Daens, Hill International, Inc.