Have you ever participated in a project that was run 100 percent according to a plan, with no delays, no budget overspending, no issues with resources, no communication problems, and no conflicts?

I didn’t think so.

There are a lot of risk factors in projects and even very experienced project managers can struggle with them.

The problem is that many project managers don’t anticipate risk in their projects. But, projects are risky by nature. Unlike operational work, which is usually the same every day, projects are experimental. They are based on assumptions regarding time, budget, and resources needed. They are planned months before they start, and, when they are finally implemented, the environment and conditions may have changed.

Threats and opportunities

A risk event is something identified in advance that may or may not happen. If it happens, it can have positive or negative impacts on the project. Possible negative impacts are called threats, while possible positive impacts are opportunities.

An example of an opportunity is the introduction of a new technology that will improve the quality of your products, e.g. software that did not exist when you planned your project. It is important to identify such opportunities.

An example of a threat is staff rotation. You might lose valuable team members during the implementation phase of the project. Training new staff can cause delays, communication issues, and disruptions to team dynamics.

The good news is that an estimated 90 percent of threats can be identified and investigated during the risk management process. This means that you can plan response strategies to minimise their negative effects on your project.

Your role as a project manager is not only to deal with problems that will arise but, more importantly, to focus on preventing them. So, don’t forget, when it comes to risk:

Identify
Prioritise
Analyse
Plan responses
Clarify ownership
Register
Monitor

Failing to perform risk management

I was consulted recently about a social innovation project where, during the planning stage, the project manager identified the very likely risk of not recruiting enough target group participants to meet the pilot numbers. It was highlighted as the main risk for this project and was analysed in detail. Everyone who read this project application understood that the target group would be difficult to recruit, due to the large number of similar projects available in this region. However, the project manager presented a convincing response plan to combat this risk.

Four months later, the same project manager applied for a scope change of the project due to the small number of recruited participants. The PM proposed to spend a significant amount of the budget on new activities that were not originally planned in the application to compensate for the lack of engagement from the target group.

I discussed this situation with the PM. It turned out that although he identified, prioritised, and analysed the risks and planned risk response, once the project application was approved, he neglected the last three phases of risk management. He didn’t delegate risk ownerships (i.e. he didn’t clarify who was responsible for preventing the risk from happening) and he didn’t register or monitor the status of the risk throughout the project.

As a consequence, this project failed to deliver what was promised. And so, remember, risk management should be a continuous and ongoing process in project management if it is to be effective.

What is your experience with risk management? Do you have risk management processes in your organisation?

During our course on Risk, Change and Stakeholders Management in Projects, we teach participants how to implement a professional risk management strategy in organisations. Soon, we will also be publishing a workbook with practical advice on risk management, which includes Impact and Probability Cards, a great tool to help prioritise risks.

Stay in touch!