Risk management

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Managing risk is an important aspect of managing projects, however, in my experience, it is sometimes given the briefest consideration by project managers. A risk register can be seen as just one of those things a project manager needs to have to run his or her project. It’s in PMBOK and Prince so there must be one! These project managers often believe that as long as one exists they can move on to other more interesting things.

However, the Project Management Office should be taking a closer look at risk registers and making a judgment on whether they are up to date, have the right actions and owners, etc. and not just be content that one exists for each project. I have seen this happen with PMOs who fit into the admin PMO category as opposed to the value-adding PMO category. (See blog – The rise of the PMO.)

Developing a risk register is important so that the risks can be identified and, more importantly, actions can be planned that can mitigate or avoid the risk.

I interview a lot of project managers and I always ask them to define a risk and an issue. It is surprising and worrying how many get the answers wrong. I am not looking for one particular definition but an understanding of the concept.

  • A risk is something that may happen that would adversely affect the project, e.g. a delay in the project delivery or even non-delivery of the project or an aspect of the project.
  • An issue on the other hand is something that has happened and action must be taken to limit its effect on the project.

A simple analogy can help explain the difference. There is a risk that my house may burn down and I have purchased a fire extinguisher to reduce the impact of a fire if there is one.

My house is burning down and I need to do something about it NOW.

Clearly, a project manager and his or her team should take every action to avoid risks turning into issues. The way to do this is by careful risk assessment, risk mitigation and risk avoidance.

The key point is that risk and issue logs are not there to be ticked off but to be actively looked at, assessed, mitigated or avoided.

I remember sitting in on a project progress for part of a programme I was running. The project manager dutifully ran through the risk log and then moved onto other business. I had to intervene as some of the risks that were on the log had a significant and adverse impact on the programme that I was managing yet there was no real effort made by the team to really work out if enough was being done to prevent these risks becoming issues. In this example, the process of managing risk had taken over from the real point of why risk should be managed.

Bestoutcome’s PPM tool, PM3, has risk and issue registers at the project and programme level. PM3 also has a risk rating for projects before they start and at stages or quality gates throughout the project. This risk rating functionality together with mitigation actions have been put into an app on the app store called Project Risk Gauge.

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David Walton
About the author
David Walton

I am David Walton, Programme,Project and Portfolio Management specialist and director of Bestoutcome here in the UK. We make the PMO tools PM3, PM3time and PM3change, the only PMO tools designed by practitioners for practitioners.

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