Risk Management Tools and Tips for Project Managers
Risk management is critical to the success of any project. Here are a few tools and tips you can use to manage project risks.
Project managers think about risks to project scope, schedule and cost on a daily basis. In this video presentation, we talk about tools for project risk management using practical examples that can help you plan, monitor and control these risks. This video is from our 2-part presentation on the Art and Science of Risk Management at a recent monthly meeting of the Northeast Florida Chapter of the Project Management Institute.
In the first part, we discussed how individual perceptions, shaped by social and cultural factors, influence our attitudes about risk and uncertainty. We experience this softer side of risk management frequently, when the same situation is rated as high risk by one person and as low risk by another. As project managers, we have to understand and manage these perceptions, including our own. That is where these tools and tips can be effective.
Some of the questions we are focusing on during this part of the presentation are:
How does organizational culture influence risk management?
What is the difference between an issue and a risk? When does an issue become a risk?
How can we use the Plan-Do-Check-Act method for project risk management throughout the project lifecycle?
How to identify, analyze, evaluate and control project risks?
How do cost-benefit considerations affect risk control decisions?
A key point to remember is that risk management is not a one-and-done exercise. It is an iterative process that spans the entire project life cycle. It involves planning, identification, analysis, evaluation and control. Selection of appropriate tools and a systematic framework for ongoing analysis and evaluation is important. Successful project managers are also able to focus on a few leading indicators which can provide early warning of emerging risks before they result in a negative outcome for the project objectives. They are constantly scanning the horizon for known-unknowns and unknown-unknowns, and taking timely action to mitigate the negative effects, or leverage the positive effects of these risks. This makes project risk management an ongoing activity throughout the project life cycle.
Note: Slides accompanying the video presentation are available here.
References
ISO 31000 – Risk Management Guidelines, February 2018
The Softer Side of Risk Management, September 2019
Check out these related articles on LinkedIn:
Risky or Not? September 2019
Risk is a Personal Thing, July 2019
Dangerous Does Not Equal Unsafe, February 2019