Project Risk :
Risk management is a required component of all project management frameworks
Some of the clearest indicators of project maturity are to be found in attitudes to risk. An attitude that sees discussion of risk as "being negative" or "evidence that you don't support the project" is that of a novice, and reveals a lack of knowledge about the nature of the typical project environment.
Risk and the novice.
The naive attitude towards risk is based on a number of false and discredited beliefs including:
- "The emergence of a threat means we haven't done a thorough job of planning - after all, in our plan we should have thought of everything".
- "When you talk about risk you are opening an escape route if something goes wrong - today's threat is tomorrow's excuse".
- "If you are thinking about what could go wrong you are being negative".
- "Risk mitigation just means extra costs that would be better applied elsewhere".
- "Open discussion of risks will make the project's backers nervous".
Risk and the professional.
The experienced, mature project stakeholder recognises that:
- Every project is a journey through uncharted territory.
- The project environment yields a continuous flow of unforeseen events - many of which can hurt us.
- If we plan as if the world is perfect and something goes wrong, our plans are left in tatters.
Many of the things that do go wrong are not only known about in advance, but they can also be managed.
Risk management and litigation.
Wherever there is even the remotest possibility that, as a result of project failure , you are exposed legally, you must seek advice from a properly qualified professional.
In every project you must be able to show conclusively:
- The existence of documented, robust and quality assured procedures for the periodic analysis of threats and for their ongoing management.
- That everyone involved with the production of project outputs works continuously in accordance with those procedures.
What is risk management?
Risk management is an "above-the-line" activity - based on:
- Identification of risks together with an assessment of their likelihoods and impacts. When taken together, likelihood and impact tell us about the risk exposure of the threat concerned.
- Assembly of a risk mitigation program of actions to reduce our overall risk exposure.
- Analysis of the costs and effectiveness of available actions.
Risk management is a required component of all project management frameworks. Clearly the approach to risk management in a four-week, three-person project will be quite modest - but it is there nevertheless.
Projects without a formal risk management facility are projects that should not proceed. Key stakeholders who do not support accepted risk management practice are in danger of becoming critical project threats.
© John R. Smyrk
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