The word “Risk” generally signifies a negative implication which should be ignored whenever possible. In project management, the term risk has a less menacing and more realistic approach. It implies uncertainty—the possibility that certain activities will not go as planned due to uncertain risky situations. This can either have a positive or negative impact on the project.
Risks are a part and parcel of any project. For successful delivery of a project, it is essential to cope up with the risks associated with it. As Jim Rohn, a famous American entrepreneur and author once said, “If you are not willing to risk the unusual, you will have to settle for the ordinary.”
But there are some menacing risk mistakes which hinder the smooth functioning of a project. So how do we identify the risks which are critical in judging the viability of a project? To answer this question, we have listed below some of the most common mistakes made to manage and avoid project risks:
- Contemplating only threats, not opportunities
In project management, we generally observe threat as a measure to determine the impact of risks in the project. But few managers fail to consider an opportunity as a risk event. As a project manager, you need to deal with all project risks consisting of both opportunities and threats for a successful project delivery.
- Failing to identify the sources, consequences, and outcome of risk
The primary step in assessing risk taken by a project team is to identify the risk which may impact the project work flow and understand the attributes as well as the outcome of each specific risk event. Being part of the project team, you should identify what causes risky situations in business. Accordingly, design checklists and adopt problem-solving techniques to face any adverse situation.
- Not considering other possible risky incidents in addition to adopting checklists
One of the means to identify risk is to maintain a checklist. However, this does not necessarily indicate the only measure. In order to avoid any risky situation, your team should look beyond the tasks listed on the checklist, which may hamper the project. One such task can be a good brainstorming session conducted among the team members that could help in mitigating other risk events.
- Belittling impacts of risk events
Another risky mistake that is commonly observed, is understating the risk impact. This can have severe consequences in terms of project timeline, performance, expenditure and quality. Therefore, you must take care of every aspect while determining the risk impact value of the project.
- Poor project planning
One of the most commonly observed mistakes is improper planning of the project. This triggers project teams to deviate from the project plan. Being a project manager, you can avoid this by adopting measures to reduce the possibility of a risk event by building a scheme to deal with its probability to a certain extent.
- Ignorance about potential risks
Risk analysis helps in understanding the impact of each risk. Try to prioritize the risks which could help in managing the threats and opportunities of the project. Being sensitive can go a long way in invading the possible outcomes to potential risks.
- The terms “risk response planning” or “mitigation” are often used interchangeably
“Risk response planning” or “mitigation” is not one and the same thing as generally perceived. Mitigation simply refers to only one response technique used for tackling the threatening risks in a project. Whereas, risk response planning defines the risk management plan and has a wider scope. Being a project member, it is important that you have a good clarity and understanding of the difference between the two terms.
- Ignoring Contingency plans
Most project teams usually ignore contingency plans in the project. You should understand that these plans are essential and should be taken into account in case of a risky event. This also acts as a backup plan.
- Lack of accountability of team members for specific risk events
As a project manager, you should engage every team member as per skill-set in owning project risks. The respective member must execute the risk response plans, monitor, and report on the risk status in a systematic manner.
- Failure to recognize risk management as a continuous process
Risk management is an ongoing process, but some project managers render it as a temporary phenomenon. Being a project supervisor, you should consider a risk management review as an indispensable component of every project team meeting. This would keep the project team well-informed about the project goals and alert them in case of any project diversion.
We have observed that risk management is the process of augmenting the outcome of potential opportunities and reduce the threats of the project to the best possible extent. In this piece, we have made an attempt to cover the topmost risk mistakes made by project teams in handling the projects and how these greatly impact the worth of risks in project management. Averting these risk mistakes can be very helpful in contributing towards the successful delivery of any project.
Author Bio: I am Maria Thomas, Content Marketing Manager and Product Specialist at GreyCampus with eight years rich experience on professional certification courses like PMI- Project Management Professional, PMI-ACP, Prince2, ITIL (Information Technology Infrastructure Library), Big Data, Cloud, Digital Marketing and Six Sigma.