No matter what the industry or the organization, there are some perceptions with regard to risk management that run similar across. Maybe you too have noted the co incidences, maybe you have some unique observations of your own to share. Maybe you agree with the prevailing thought, maybe you believe in the contrary. How, for example, would you respond to some of these notions?
Right or wrong? “I can’t be bothered about Risk Management now! Let me do my job first.”
My two cents: For starters, risk management is a part of our jobs. And this is not just the project manager’s cross to bear. Risk management is the responsibility of every team member. Because risk has a direct or indirect bearing on that job that we are so eager to get done. What we choose to ignore now or put off for later may well come back and bite us when we least expected.
Right of wrong? “Planning for risks only reveals a negative attitude. Nothing can possibly go wrong here.”
My two cents: Like it or not, Murphy is alive & well…in our projects. I know in today’s times of super advanced know how and technology, we hardly expect things to go wrong. Sadly, as our knowledge and the benefits of technology multiply, so do the complexities and inter dependencies. For every one hole that we plug, there are two new ones that peep out elsewhere and so we can ill afford to let our guard down. The delays in the Boeing 787 project, the political hurdles faced by the Nano project and many such others bear witness to the fact that even the most experienced and even the most knowledgeable projects have to battle uncertainty. And on that note – the word “risk” is probably one of the most incorrectly used in common parlance, most often taken to connote something negative. Bear in mind that in the project management sphere of things, risk merely implies the uncertainty of an event; the outcome of this surprise could well be a hitherto hidden opportunity.
Right or wrong?: “Risk management is expensive.”
My two cents: Not as expensive as the failure to do something about it, costs here referring to both time and money. Studies reveal that steps taken to plan and execute risk mitigation strategies are far more cost effective than the expenses of ignoring a possible eventuality or passing up a novel option. The technique is to integrate risk management into the overall scheme of activities rather than approach it as a stand alone task. This not only ensures that the overall cost of risk management is evened out but the easy flow of information from other areas also helps keep risk management proactive and up to date. Also the project team needs to strike the balance between different risk mitigation strategies like what to transfer and what to accept, how much to exploit and how much to share.
Right or wrong? “A rigid, standardized approach to risk management is enough.”
My two cents: One size fit all? Couldn’t disagree more! Say, we are planning a party and the weatherman predicts a possible thunderstorm. Would we carry the same number of regular umbrellas for a party of 40 as we would for a party of 4 or opt for something that offers stronger and better protection? Who knows, we may choose to move the party to a different location or even cancel it maybe. Likewise our risk management strategies need to take into account the differences in times, scale of operations, regulatory requirements, competitive pressures – all of which vary between industries and organizations. Implementing an out of the box methodology or pursuing a successful strategy from a similar organization or project may not necessarily ensure success.
Further risk management is never a one time job. The criteria that determine our initial choice of contingency planning are always in motion. Hence flexibility to change and constant monitoring is warranted as is the identification and analysis of new risks identified followed by updation and tailoring of the contingency plan to suit the current needs.
Right or wrong? “Why bother? No one can plan for the unknown.”
My two cents: Agreed to an extent. One can hardly predict events that lie beyond the realm of normal expectations, but that is hardly an excuse to close our eyes to the possibility of their occurrence. While the known is comfortable and the repeated and tangible are easy to manage, it is our ability to consider even the most unforeseen and plan for the same that determines our company’s viability. It has been reported that some firms did plan for the possibility of a long term disruption of their business operations due to a catastrophic event taking place in Manhattan and were up and running from alternate operational centers within hours of the fatal events of 9/11. What we are likely to face in our day to day project activities is probably a fraction as disastrous, but would we rather face them absolutely clueless or prepared with at least some kind of a plan?
