Risk Management should be a day to day process for every project. Even during the proposal process, risks start to become identified. There are any number of events and actions that can affect a project, sometimes they are threats and sometimes they are actually opportunities. If you don’t already have one, start now to create a process for tracking and reporting on risks. Keep an eye on the daily activities and respond to them but also continue to identify risks, determine their potential triggers, define acceptable levels of deviation and establish a protocol for responding to the risk when and if it happens.
In the webinar, PM in Theory – Risk Management, Diane White, Instructor and Curriculum Development at Core Performance Concepts shares her expertise in risk management. Diane identifies the critical objectives to use when working through risks and then breaks down each of those areas further to share her many years of experience.
Generally speaking, small projects tend to come with small risks and large projects with large risks. You might consider using a different process depending on the size of the project. For example, a project that will start and complete within 1 week obviously needs a different set of risks than a 2 year construction project. And don’t forget, not all risks are bad. For example, in the construction industry, bonuses are generally paid for early completion.
Team members should feel free to offer up ideas that could streamline or speed up the project in order to deliver early. Maybe it’s not critical that the delivery be visually perfect but rather only functional while the final details are finished up. Challenge your team to come up with ideas. Share the ideas with the stakeholders and see what sticks. Your stakeholders will appreciate your efforts and will be more receptive to bad news when you are proactively and simultaneously working good news.
The webinar with Diane goes deep into various types of treats and opportunities and helps identify strategies for each. Transfer, mitigate, accept - these are just a few that are discussed and can help as you work the project.
In the end, sometimes just accepting the risk is the only option. Diane spends a good deal of time in the webinar discussion how to determine when it’s time to accept the risk.
Contingency Planning is another great way to plan for risk. Proposals should include a plan for contingency reserves (sometimes called management reserves). In my experience, 10 percent is usually a good contingency budget. Having this in place with the client from the very beginning takes the burden from each individual item becoming a serious problem. Imagine having a client that has to go back to his management each time something changes, not only does it make the client look bad to his team but ultimately can affect everyone’s perception of your ability to manage risks. With a contingency budget in place, you and the client can work through the inevitable ups and downs of the project without having to bring in outside sources.
In the webinar, Diane goes on to discuss triggers, how to define your triggers and then taking action once the risk has been triggered.
Good planning, documentation and communication are the keys to successful risk management.
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ABOUT THE AUTHOR: Patti is a Project Management Consultant with over 15 years of experience managing complex website projects. She works with clients in many industries including software development, healthcare and professional organizations. Learn more about Patti on LinkedIn.