“Risk comes from not knowing what you are doing.” - Warren Buffet
Just because you’ve been a project manager since the days of “Gilligan’s Island” is no guarantee that you are getting better.
As a matter of fact,
you may be stumbling about trying to get off your island. Even the Skipper and the Professor can’t seem to help…encouraging…huh?
I have audited many projects through the years. Without exception, the projects in troubled waters have one common factor – a lack of basic risk management.
Why do project managers resist risk management? Don’t have time. That’s like saying you don’t have time to sleep.
Tried it but no one seemed to buy in? It’s time to apply risk management in a way that demonstrates the value.
Here are ten ways to improve your project risk management and improve your chance for success.
- Habit 1: Define what you mean by risk. The term “risk” means different things to different people. Some individuals think risks are negative events (i.e., threats); others include positive events (i.e., opportunities). Whether you are starting a project or a program, be clear about what you mean by the term risk.
- Habit 2: Define and use a Risk Management Plan. Many project managers and project teams approach their projects with no idea of how they plan to identify risks, evaluate risks, define risk response plans, or control risks. Don’t make this mistake. Define a Risk Management Plan…get an agreement up front with your team as to the approach and the amount of rigor you plan to use.
- Habit 3: Use a Risk Register. Where will you capture your risks? What will you include in the Risk Register? Keep the register simple and transparent. Make sure all of your team members have ready access to the register.
- Habit 4: Help everyone on the team be a risk manager. Use your leadership skills to influence your team. Educate team members on the value of risk management. Recognize team members whenever they are proactive in risk management.
- Habit 5: Get the team to help you evaluate risks. At a minimum, perform a simple qualitative risk analysis to prioritize your risks. Still need additional information in order to make decisions? Need to estimate budget reserves? Perform a quantitative risk analysis.
- Habit 6: Assign or recruit risk owners. Many project managers have a bad habit – they own ALL the risks. Why do project managers do this? Perhaps the project manager thinks it’s too much trouble to identify and recruit risk owners.
Yes, recruiting risk owners may require time up front, but in the long run, you’ll be much better off. You will have the individuals with the right skills to monitor the risks and execute the response plans when needed. - Habit 7: Have risk owners develop risk response plans. Keep things simple. Have the risk owners develop risk response plans for the most significant risks only, those risks with the highest risk scores. Determine whether a contingency plan and fallback plan are required for each of the top risks.
- Habit 8: Regularly monitor risks. Project managers often start their projects strong with a risk identification session. However, many project managers fall asleep in their project hammock. Make sure you periodically reassess your risks. Why?
- Risk exposures are dynamic rather than static; they change over time. Identify changes that require adjustments to the project.
- Changes in the risk probability and impact imply the possibility of changes in ways to treat risks.
- Identify emerging risks.
- Habit 9: Report the most significant risks to the project sponsor. Keep you sponsor engaged. Report the top risks to your sponsor, the skipper of your project. Forget email. Seek face to face meetings. Keep it brief and to the point.
- Habit 10: Close out the risks. When most project managers finish one project, they jump straight into the fire of the next project, losing an opportunity. At project closure, take time to review every risk in the risk register. Determine what happened: (a) did not occur, (b) occurred and contingency and/or fallback plan was used, or (c) occurred and impact to the project. This final risk review can provide valuable insights for future projects.
Forming habits requires repetition. Pick a few of these items for your next few projects. Repeat the activities for three to four weeks. It may be helpful to create a reminder to perform each activity at a specific time. Track the habit.
Add additional activities over time in the same manner until you are performing all 10 habits with ease. Who knows…perhaps as you apply these habits, you will find a way off of Gilligan’s Island and reach your real destination. Happy sailing.
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