Is your project ‘risky’?
What does it mean when we talk about high risk and low risk projects?
Such statements are somewhat vague and lack in practical guidance.
As project management professionals we need to be aware of the actual risks of a project (both good and bad – opportunities and threats), including the causes, likelihood, timing, impact and severity of a risk. What can and should we be doing (better) in terms of risk management in reality?
7 key tips to manage project risk
1. Risk at the start. Carry out a risk assessment in the early days of the project. It is of more value to recognise that a project is ‘too risky’ sooner rather than later. This may mean a bold decision to cancel the project – better now than once considerable spend has been made.
2. Risk throughout. Don’t stop thinking risk! In too many projects risk is only considered at the start then literally forgotten about until suddenly ‘disaster’ hits.
3. Risk at key points. Review risks during each phase/stage of your project. Remember there are existing risks, but there is also the possibility of new emerging risks. At suitable points (e.g gate reviews) get agreement from management on whether the level of risk is acceptable to continue with the project. Is the project still justifiable given the current level of risk?
4. Risk and changes. Watch out for issues and change requests that can impact risk (new and existing). Maybe a request for change can help mitigate an identified threat. Alternatively, it may increase risk exposure or introduce a risk previously not identified.
5. Risk and ownership. Ensure that each risk has an ‘owner’. The owner is not necessarily the project manager (especially in a large project this can be counter-productive). Owners should be managing and monitoring their risks; as a project manager ensure the risk owner understands the importance of being on the ‘lookout’ and updating the risk status as needed.
6. Risk and lessons. How you identified and addressed risk may be useful for other projects and even the rest of the organisation. Take time during the project and at project closure to document any useful learnings in relation to risk.
7. Risk at the end. At project closure, check for any risks that may impact the project’s deliverables/final product in its operational or business as usual life. Ensure appropriate ownership and follow-up after the project. You have gone to all that effort to lead the project to a successful end – ensure life of the final deliverable after the project is set up for success.
Risk management is part of day-to-day project management reality. The challenge is to assess a project’s exposure to risk (ongoing, not just at the start) and manage any exposure to an acceptable level, given cost constraints. Remember, projects are characterised by uncertainty – the cost of taking action needs to be balanced against the cost of not taking action.
“A good project manager prefers to be good at managing risk and not good at fighting fires.”
PRINCE2 Agile®, 2015
PRINCE2 Agile is a trade mark of AXELOS Limited