Good risk management can significantly enrich the project’s scope and success rate. Unfortunately, we often come across a pro forma risk management that can become a pretext for inaction, where real and dangerous risks are merely discussed, noted and accepted in a risk log, without proper action being taken. And that amounts to unintentional gambling with the entire project. We always seek to create good and proactive management of risks!
Risk management is a necessary part of project management, regardless of the type of project. Risks come in all shapes and sizes, and thus they can also come in the shape of financial or operational risk management. Regardless of the type, risk management is all about identifying risks in the project portfolio and assessing, how these should be handled, in order for them to have as little impact on the project as possible, or seeing how they can be utilized as new possibilities. This can be anything from an acknowledgement of the risk’s existence to a full plan of action, describing what has to be done and by whom, when the chips are down. In this way you give your project the best possible conditions for achieving the desired effect.
Why is it important?
Typically, steering committees accept risks, which are either outside of their decision authority, or which are for other reasons considered something, they cannot control or influence. It may also be, that they believe a given risk to be beneath an unspoken triviality limit. This is a shame, because it is precisely under these circumstances, that one can use proactive risk management to create even better results. These can for example be:
- Increased success rate with projects
- A new and strengthened management style
- Anchoring of risk management and governance