By Hani Hmedeh
Risk management is a widely used term today. If you think you can manage a project successfully without risk management, you are completely wrong! Not implementing risk management is a risk by itself, and implementing a poor one is a higher risk. In this article, I will highlight the risk of not implementing a proper Risk Management process.
Let’s start from here… You have definitely heard about a project that was never completed or never delivered any value or the objective in the business case wasn't reached by the time that you have invested a lot of time and efforts. This is what we call a poor Risk Management that leads to Project Failure.
So, how to incorporate the right risk management process in your project controls to have an early warning of potential risks?
First, projects are not equally risky, and your risk management process should be scalable and adaptable to match the degree and types of risk your project may encounter. Unfortunately, some project managers think of risk management as a task that is started and completed as part of project planning, where others think that risk management is the only dominant task in the project implementation, and this is a risk by itself that can lead to overwhelming the team with extra activities or underestimating the impacts of risk events.
Second, identifying risk is just the start where monitoring them periodically is the alert that should trigger you and the team to respond to this risk and keep the project under control. By not monitoring your risk periodically, you are putting your project at a higher risk by having a mechanism without a starting point.
Third, Losing Opportunities…how many times have you heard about “lost opportunities”? most project managers develop plans to deal with threats, and very few of them plan for opportunities. Project managers should plan to take advantage of these opportunities; at the end of the day, losing opportunities is nothing than losing market share and accordingly losing business continuity.
Fourth, risk management process is the essence of the lessons learned process. Similar projects usually have similar risks and they share the same characteristics. By sharing the risk management experience throughout the organization gives future projects a library of best practices to call on.
The key point is that risk management is ONE of the main on-going processes over the entire life of the project. Risks can kill a project’s benefits overnight, or they could be slowly eaten away through inefficient management practices.
Keep in mind that risk management doesn’t have to be difficult. When you right-size your processes and have the support of your team, it’s easy to see how a risk management approach fits right into your existing business
Finally, risk management is an essential element of organizational success. The secret of successful projects is closely linked with the ability to take risks and correctly managing them and communicating results. By not implementing a formalized practice of risk management it becomes a risk by itself, and when things can go wrong they will go wrong (if no action is taken).
By Hani Hmedeh