Looking for ways to reduce deviations? The answer can be found in risk-based thinking. Risk management is a key knowledge area that supports project managers in achieving project success. The proactive nature of this project management helps project managers think and apply preventive measures that save on the cost of change and schedules. The successful application of risk management has made this knowledge area an indispensable chapter not only in the PMI’s PMBOK Guides in all editions, including the sixth edition but also in the latest quality management systems such as ISO 9001:2015, AS 9100 Rev D, etc.
Risk-based thinking
Risk-based thinking enables organizations to determine the factors that could affect their processes, operations, projects, and management systems, such as quality and supply chain, to deviate from the planned results. Moreover, this risk-based mindset puts preventive controls in place to minimize adverse effects and maximize opportunities as they arise. Then, we can assert that the project success rate increases if the organization realizes this mindset and implements quality management systems.
Perspectives about risk and opportunities
My company recently completed the audit for AS 9100 quality management system prepared by the International Aerospace Quality Group (IAQG). This system is designed “to ensure customer satisfaction, aviation, space, and defense organizations provide and continue to enhance safe and reliable products and services that meet or exceed customer and applicable statutory and regulatory requirements” (ABCI Consultants, n.d.). During the implementation phase of this system in the last 1-5 years, the most stunning part was the focus on risk and opportunities, especially mentioned from the following perspectives:
- Product safety (whether the product is designed or used without causing an unacceptable risk of harm to persons or property damage).
- Customer focus (the risks and opportunities that can affect the conformity of products and services, which may result in customer satisfaction or dissatisfaction).
- Leadership (promoting the use of risk-based thinking).
- Operational risks (the organization is expected to plan, implement, and control a process for managing operational risks to achieve applicable requirements).
Risk-based thinking has emerged
As risk-based thinking has emerged and spread throughout the organization, this mindset has strongly supported project risk management. Proactive measures have decreased the cost of change and increased compliance with due dates and scope. In summary, the success rate of projects has increased.
Opportunistic perspectives triggered by risk-based thinking
Risk-based thinking has also triggered an opportunistic perspective in employees. Organizations have supported efforts to identify possible opportunities in an uncertain environment, and unexpected benefits have started to arise as projects and programs are executed. This transformation in mindset has already begun to show up in companies’ financial performance.
Uncertainty is a part of life, but we can reduce deviations. Healthy organizations have come to terms with this reality and let their human talents act accordingly. Risk-based thinking will boost performance in this increasingly complex and uncertain environment.
Similar Content:
-
Managing uncertainty vs. the cost of change?
-
Managing risk: Are you situationally aware?
-
The pendulum effect: How time and memory impact the application of risk management
