Demystifying the art of risk management.
Many projects have evolved from good ideas in the boardroom, to a crescendo of enthusiasm amongst all parties. But it is when that project is assigned to a project manager and the gravity of the project sinks in, many apt supporters shrink away to their sub part of the office, praying they are not assigned to the sub-committee. Many projects have failed for many reasons, including 12% of all projects failing because of poor risk management.
But what is Risk Management and why is it important. Risk management is the process of identifying possible risks to the project, planning an appropriate response and managing any risk that occurs so it doesn’t derail the project.
The importance of research
At the beginning of the project due time should be spent researching and developing the project scope, what the project is expected to accomplish, and the major benefits expected.
Often times the list of expectations will be large, but sometimes all will not be able to be met.
It will be important to streamline the expectations and determine which are acceptable not to include and it is very pertinent that once the exclusion list has been prepared, all stakeholders are clear what will not be achieved during this project.
Let the voices be heard
Involve all stakeholders no matter how insignificant their role to your project may be , as it may be some hidden insight they provide you with that turns out to be the key to turning the project into a success for all or key learning that should be added to your risk register to watch out for.
The risk register will become you’re in ‘case of emergency’ plan that you refer to, to ensure none of the risks you’ve identified have begun to rear their ugly little heads. If they have, you’ll want to have a predetermined response for that risk, that can be implemented to keep the project humming along.
Also, it’s important to note, that while all stakeholders should be heard, all of them will not hold the same weight of influence, so you will have to rely on your management insight to determine, how each opinion should be weighted.
Strategies for risk responses.
Many project managers will normally run headlong into the execution of their projects without developing a list of risk responses to those identified on their risk register, but that tends to be a huge mistake. As when problems arise, they will have to then figure out ways to address the problem on the fly, rather than being able to draw on the insight they have already gathered.
Having a plan in place to address risks not only reduces the stress level induced by the risk but may save you time and money on the project that may not have been accounted for.
Executing the plan
Determining the right course of action does mean putting the key stakeholders’ objectives at the forefront and then trying to implement the right solution that not only achieves the defined project scope, but also incorporates the feedback you’ve received from the stakeholders that has been prioritized.
Now an important step that often gets overlooked in this stage will be having the ability to monitor and control the project and conducting a spot analysis of any issues that may arise.
As issues arise it is important to not ignore them, but at this time refer back to your risk register to identify the severity of the risk and whether or not the risk should be addressed or not.
Managing the risk
What most fail to understand is that tending to a risk, does not necessarily slow down your project but it can prevent the project from derailing as the risk grows. Some risks when left unchecked begin to metastasize and begin to crumble a project from within. But when the proper risk technique is adhered to this can be easily controlled and eradicated.
Two of the items that I’ve found helpful when planning to manage risk has always been building some reserve time into the project, as well as a reserve budget. Allocating for extra time, contained within the project schedule allows you to remain on your projected time schedule while maintaining some sense of balance to the project, while you attempt to correct or realign any item that may have slowed or halted the progress of the project in anyway.
Also being able to access reserve funding that has been allocated for this exact purpose, not only helps manage risks, but it also instills a sense of confidence in your team and stakeholders when you can manage an expected or unexpected occurrence and still remain on budget.
Marching to the finish line
Once you have managed all of the risks in the project effectively, the most important step is bringing the project to a close and having a successful project closure. One thing I definitely cannot stress enough, is continually providing feedback to the key stakeholders all throughout the project, as this helps keep them informed and provides greater alignment with the project outcome and the deliverable expected.