Four simple steps to managing your project’s risk.
It’s not hard to come up with examples of why organizations need to spend resources to study and alleviate their risk. We’re still unraveling the impact of the recent data breach at Facebook. Remember the single “rouge” trader at USB who lost $2.3 billion (US) in unauthorized investments. That’s $2.3 BILLION. That is a lot of ramen noodles right there friends! Even worse, that Rouge Trader was carrying on these sly shenanigans for three years. Three YEARS! I’m no expert in audit, or compliance, or even corporate risk, but that seems like an awfully big loophole that was exploited for an awfully long time without raising any red flags. Until stuff hit the fan that is.
It happens on a smaller scale too. This is why you need a receipt for a cup of coffee you got in the airport while travelling standby from Boston to San Diego. Companies need to make sure nobody is fraudulently using corporate assets. They are defending against the wrong-doers. Yes, corporate risk policies are a pain in the ass. But they protect the company – legally, financially, reputationally, etc. I don’t enjoy them but I appreciate their purpose. Their not so distant cousin is a risk management plan for your project.
“What Chris? Why do I need a risk plan for the project when there is a risk plan for the organization?”
Because there are risks specific to a project to be aware of and manage just the same way there are risks to an organization that need to be identified and addressed. Miss either one and the result is the same…increased risk. Managing project risk is just one of many strategies within a project. It doesn’t need to be overwhelming. Get started by looking at the basics.
Recognize the risks that come with or from a project. Sure there are ones to the organization if you don’t do the project, but what about the ones within the project itself? What are the things that could hinder the successful completion of the initiative? Think broadly across all aspects of your project. I know of one project where the team working late into the night had to walk to their cars unmonitored down an unlit road within earshot of the “not so great” element. Not the risk you would typically think of, but certainly a risk to the people on the project.
Measure, measure, measure! We all hate metrics but to know just how serious a risk is we have to apply some measurement. No need for some wicked algorithm. Keep it simple. Decide how big a risk it is and how likely it will happen. Create ratings for those two criteria and assign them to each risk to see which things are critical. The key is consistency and agreement. Define each rating and get clarity on why the rating was applied from those who understand the risk best. On that same project, after someone’s car was broken into, it was clear there was a substantial concern for personal safety. Folks were less inclined to work already long hours if they were also in danger going home.
Mitigating those risks is your next step. Be expansive in your thinking, some solutions are easy to spot and some take creativity. A rather restrictive union contract prevented the organization from adding a late security shift or employing an outside company. But a $20 investment in an outdoor light bulb helped light the walkway. The team got flashlights with the project logo and instituted the buddy system. And my favorite fix of all, on late nights the project team got permission to use the empty executive parking lot. Low dollar solutions with big payoffs.
Lastly, you need to manage your risks. Thinking about them once will not cut it. Monitor each one and work your mitigation plans. Risk evolves like anything else within a project so it needs attention on a regular basis. Once they decided what to do about those dark walkways they made sure the lights got fixed and everyone had a flashlight and a buddy. It just became part of how they worked.
Don’t jeopardize your project’s success by overlooking its risks. How are you handling your project risk?
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