Facing Risk Head-On for Project Success

Risk is an inherent part of any organizational change or project. Rather than avoiding or fearing risk, project managers need to systematically identify, analyze and mitigate risks as part of their core responsibilities. However, project managers often encounter sponsors or senior leaders who mistakenly believe there should be minimal risks when delivering a project, or they try to deny risks exist at all. This fear of risk can cause viable projects to stall or be shut down prematurely. Here are a few steps PMs can take to help shift this mindset and face risk more productively.

1. Thoroughly define risks??

Many project managers fail to adequately define potential risks for sponsors by not thoroughly examining the event, cause, and impact. For example, identifying a risk that building materials might not show up in time by only focusing on delivery issues. The actual cause of the risk might be the financial struggles of a significant supplier or a shortage of raw materials. Fully defining all possible causes and impacts upfront prevents leaders from being blindsided and losing faith in the risk management process.

2. Prioritize risks for escalation

Project managers must refrain from dumping every potential risk on sponsors. They must prioritize the risks that merit escalation based on probability, impact, and the project's place within the broader organizational priorities. Bringing 30 risks to a sponsor, some quite minor, will generate undue fear, project cancellation and a lack of trust in project management

3. Provide context and analysis

For significant risks that require sponsor involvement, project managers must provide context about why the risk is relevant. Tie the risk to key business objectives like cost, schedule, or deliverables. Presenting a risk without this context makes it difficult for sponsors to weigh the priority of the risk against other responsibilities, along with time and financial constraints. In other words, they won’t see the big picture to make a reasonable management decision.?

4. Recommend risk response strategies?

Project managers should never just identify risks to sponsors. Outline potential mitigation strategies and a recommended path forward should be included in risk communication. This allows the sponsor to approve a proposed solution rather than get mired in analysis paralysis. Presenting multiple options is ideal so the sponsor can quickly evaluate and decide between business-based alternatives.

5. Align risk tolerance levels

During project initiation, project managers should gain agreement from sponsors and stakeholders on what level of risk is acceptable for the project based on its context and goals. This sets expectations upfront about the organization’s risk appetite rather than engaging in a debate when a risk arises.

6. Normalize discussions about risk

Project managers should make risk identification and mitigation an overt part of recurring project communications. This prevents risks from being raised sporadically and becoming a fire drill each time. It normalizes risk as an everyday consideration that is professionally managed.

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Coming up

Implementing Project Management Discipline (When Groups Don't Want It)

June 21, 2024? 10AM AEST (Australia), June 20, 2024 8pm US EST

A rite of passage for project managers is to have to use project management discipline to deliver a project in an organization that doesn’t embrace discipline. It makes a difficult job even harder. Expectations of the project manager can be extreme, and stress is an everyday partner. But it doesn’t have to be that way! Join me and Mihaela Safta, an expert on implementing project disciplines in organizations, as we explore ways to implement disciplines where none exist today. This is not just a session; it's an opportunity for personal growth and professional development. Come along and bring your questions – we’ll answer them LIVE.

By attending this session, you will:

· Understand what steps you can take to start instilling some PM disciplines.

· Learn how much discipline you can expect to implement early on and what pace you can implement additional disciplines as you progress.

· Explore different ways to sell the need for discipline to senior leaders.

· Discuss techniques to make the PM disciplines “stick” for use on future projects

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Additional thoughts can be found in my project management and outsourcing classes on LinkedIn Learning, including:

• Project Management: Technical Projects
• Strategic Leadership: Deploying Intelligent Disobedience
• Outsourcing Fundamentals, the first of six courses on outsourcing. This series of courses focuses on defining services, performing service-level?management, and helping figure out what is required to support a business in an outsourcing or service provider scenario.

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This article is part of Bob’s Reflections newsletter series, which discusses project management, outsourcing, and “intelligent disobedience”, a leadership approach. If you want more of this content, you can subscribe to receive notifications when a new article is posted.

Want to learn more about the topics I talk about in these newsletters? Watch my courses in the LinkedIn Learning Library or check out https://intelligentdisobedience.com/

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