Many project managers focus much more on scheduling at the beginning of a project and don’t start giving risk management the attention it deserves until later on, especially when things start going wrong. For clarity, risk management is the end-to-end process of identifying potential risks, analyzing them, and having a plan in place to eliminate or reduce the possibility of the occurrence of these risks or address them if they do materialize.
Risk comes with a negative connotation, and people don’t like to talk about it, especially at the beginning of a project when everyone is coming together and is supposed to be happy and excited about the new venture. Identifying risks and mitigation options is not as much fun as envisioning, talking about what users want, and brainstorming solutions. Also, a lot of the material written about risk management is complex and can be intimidating to project managers and stakeholders. It doesn’t have to be this way.
The reality is that risks are unavoidable. According to Murphy’s Law, anything that can go wrong will go wrong. This is very true, especially when it comes to managing projects. Project managers are better off worrying about risks early on and throughout their project instead of waiting until risks become actual problems.
Risk Management can be as simple as bringing the right people together, asking them what could go wrong, zeroing in on those things that matter the most, and coming up with a plan to eliminate, minimize or address them if they actually end up happening. So, what do project managers need to do in practice?
Embrace risk
Start with the assumption that things will go wrong and your project is already at risk. Hope for the best and plan for the worst. Accept the fact that projects can be yellow or red, and that’s part of the process. Be proactive and make a conscious effort to keep your eyes on the long run and plan ahead for potential surprises. Don’t let the daily firefighting take over paying attention to what is coming down the road. Start identifying and tracking risks from the very beginning of the project, make risk management part of your ongoing daily routine, add it to regular meeting agendas and encourage your team members to talk about risks and management options. Keep on asking your team “what could go wrong?” and do something about it.
Set expectations
Stakeholders want to hear that everything is going great and the project is on track. Most of them don’t want to hear about problems. At the same time, no one likes bad surprises. Be transparent with stakeholders, including executive sponsors, and make sure they realize and accept the fact that, even with the best plans and intentions in place, things will go wrong. What is important is to have a solid process in place to look out for what could go wrong and plan ahead. Stakeholders should understand that bringing risks to their attention and exploring options is a natural part of the process, and doing this early and often is a much less costly approach than pushing risks under the rug and dealing with the fallout later on.
Assess & prioritize
“When everything is important, then nothing is important.” (Brian Mulroney, former Prime Minister of Canada). Not all risks are the same or should get the same amount of time and attention. You want to determine whether this is something that you need to deal with right now or if it can wait. How likely is this risk to occur and what is the impact if it does occur? Who will be impacted by this? Is there anything that can be done to prevent the risk from happening or minimize its probability? What can we do to address it later if it does materialize? Can the project team handle it or does it need to be escalated to other stakeholders? Answering these questions will help you prioritize and put this risk in the right place among everything else you have to deal with on your project.
Take action
Ignoring risks and assuming that they will go away is not a wise strategy. As the saying goes, “pay me now or pay me later,” except that the payment later will be much higher. Do something about high-priority risks that require immediate attention. Analyze the risk, discuss options with your project team and stakeholders, decide on appropriate actions and do what is needed to address the risk. Listen to your project team and stakeholders. Focus on the facts, and at the same time, follow your gut feeling if you are not sure. Keep other risks on your radar as their priority may change over time. Maintain a log of all risks, write a concise description of the risk triggers and its impact, as well as options to minimize its occurrence or address it later, in terms that all stakeholders can easily understand. Assign the risk a probability (high, medium, low) and an owner who is tasked with doing something about it.
Project managers must make risk management part of their regular routine and not let fighting daily fires prevent them from paying attention to risks. Make a conscious effort and time for stepping back and assessing risks. Keep your eyes on the long-term view and don’t lose sight of things that could come back to haunt you down the road. And keep asking: What could go wrong?
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