The profile of a typical project manager is a person who has a high-achiever type of personality. They tend to be well-educated, possess exceptional communication skills, are well-organized and organizationally savvy. They tend to embody a sense of certainty in an uncertain world.
As they guide a team in planning and executing their projects, managing the risk appropriately is what makes their projects successful in that uncertain world. Think about it. How often is a project implemented in an environment that isn’t filled with instability, assumptions, change, unexpected circumstances, and risk? Probably never. That is why project risk management is essential to successful implementation and in setting realistic expectations.
When a project is originally sold or contracted many decisions, agreements, and contracts are set. Yet at the beginning uncertainty is highest and overall project risk is actually the greatest. That does not mean the project should not go forward. At the beginning the typical risks often include unclear objectives and requirements, unavailable subject matter experts and other resources, and hasty planning. There are appropriate responses to these identifiable risks as well as ways for dealing with unidentified risks.
Risk management provides the basis upon which to identify risks, estimate the amount of cost and schedule contingency reserves are needed to cover risk response actions to provide a level of confidence for meeting project objectives, and to manage the risks as well as possible. As the implementation planning goes into detailed planning, the risk management is likely to focus more on areas surrounded with getting started with the teams work and the urgency of risk surrounding inexperienced team members, resource availability, poor role definition, unclear statements of work, compliance, and technology risks often take center stage.
Towards the implementation closure it is common for risks such as poor quality, areas of disagreement with the customer, changes, and hitting budgets tend to become the focus. At this point it feels like there is a lot of time, cost, and energy at stake and if you are dealing with risk that could hurt the client relationship, there may be a desire to throw anything and everything at the final phase risk solutions to make any negative customer impression go away.
As the organization shares their project risk experiences these tendencies can be anticipated and better managed. It is helpful for the organization to consider what PMI calls “The 6 Critical Success Factors for Project Risk Management” in the Practice Standard for Project Risk Management. An adapted version of them is listed here:
1. Indoctrinate project managers in risk management
2. Emphasize that risk management is everybody’s responsibility
3. Create an environment allowing for honest communication about uncertainty
4. Have high level management support of risk management activities
5. Scale the risk effort appropriately for the project
6. Integrate risk management with overall good project management processes
The above list forms the basis for good negative risk management. However, the flip side of that is possibly even more important as positive risk (opportunity) management is where tremendous project management value is realized by the organization. We like to call that “Thinking Positive About Risk”.
It is through the opportunity identification and appropriate response development through innovation, creativity, and advanced problem solving, that the benefits of good project and people management are the most powerful.
If Maslow’s Hierarchy of Needs were to be compared to your project, it might flow from the base or protecting your project up to realizing the benefits of optimizing opportunities, like this:
Maslow's Hierarchy of Needs
Project Risk Hierarchy
In summary, it is imperative that we protect our project from negative risk; but in order to achieve our full project, organizational, and team potential we need to strive to think positive about risk.