Risk Management for Project Managers
By Michelle Symonds
Every project has potential risks that could cause things to go horribly wrong. You need to be aware what the risks are and have contingency plans to avoid the project being a complete failure.
How to Identify the Risks
Risk management is at the heart and soul of project management, and failing to practice it can have bad effects on the project. The effort put in at the beginning to help be prepared for the risks before they happen is the best way to avoid them, and ensure the success of the project. The benefits of risk management are huge, providing you deal with uncertainties proactively.
To identify the risks you need to keep an open mind and focus on scenarios that might happen in the future. Talk to team members; find out what experiences they have had on this type of project in the past. They may reveal problems that have not crossed your mind, or opportunities you were not aware of.
Another way is to read the reports of older, similar projects. Identify where they went wrong, and learn from them.
- See what happened before
Looking at the events that led up to a problem can be very productive. Lessons can be learned to try and prevent that particular problem happening again. This may also allow you to find more information about other risks and the likelihood of them happening.
All through the project, keep communication lines open with everyone. It is nothing unusual for the project manager to be the last to find out about a problem, workers assume you know everything, but you need your team members to let you know what is happening. Make sure the risks are high on the agenda of every meeting, so it’s realized how important they are to you.
Consider the good as well as the bad
Whenever risks are talked about, the assumption is that they’re bad. Modern risk management also looks at the positive risks, the things that could help you project, not just the things that will hinder it. Considering the positive risks with your team can only raise moral, and the happier the team, the better they work.
Record the project risks
It is a good idea to keep a log of the potential risks. If any of them do occur, you should record how they were dealt with. A good risk log would enable you to carry out some basic analysis about the causes and solutions to the problem.
There are three main responses to a risk if they turn into a reality:
- Risk avoidance – where you may have to change suppliers or workers to stop the risk reoccurring.
Risk minimization – is where you try to keep the effects of the risk as small as possible, try influencing the causes and decrease the negative effects.
Risk Acceptance – can prove to be the best choice on occasions, particularly if the solution will be time consuming or expensive.
The risk management procedures could well be the saving of the project, and is as important, if not more so than many of the other aspects of the project. Risks can either be viewed purely as a problem or you can take the view that a project problem could be tomorrow’s opportunity.
Most professional project management courses will cover identifying, prioritizing and mitigating risks as a fundamental part of effective project management training.
Michelle Symonds is a qualified PRINCE2 Project Manager and believes that the right project management training can transform a good project manager into a great project manager and is essential for a successful outcome to any project.
There is a wide range of formal and informal training courses now available that include online learning and podcasts as well as more traditional classroom courses from organizations such as Parallel Project Training.