5 Risk Management Mistakes To Avoid

I’ve been mentoring a junior project manager and we were reviewing the risks on his project last week. We went through all the risks on the log and we talked about good practice and what he should be actively doing to manage the risks. Then he asked me a question. “What mistakes should I be looking out for?” he said. I thought this was a great question. Too often we focus on what we should be doing and forget about what we should avoid doing! That’s when mistakes creep in as we haven’t been focused on stopping them from happening. So here is my list of 5 mistakes to avoid when you are carrying out risk management on your project, which I shared with my colleague.

Mistake 1: No Risk Owner

Your notes in your risk management software should always include who is responsible for owning the risk. That means writing down the name of the person who will ensure that the risk management tasks are carried out. That individual doesn’t have to do all the work themselves, but they should coordinate the people who are actually doing the work and make sure that the risk log is updated with progress and that you get status reports as required.

Don’t be tempted to record your own name as the risk owner for every risk. Many risk management plans would be better off led by a subject matter expert and this can also be a useful development exercise for a more junior member of the team who wants to take responsibility for a small, manageable piece of work.

Mistake 2: No Action Plan

Each risk should have a documented action plan. This sets out exactly what is going to be done to prevent the risk from happening. Sometimes, of course, you will be taking no action and are prepared to accept the risk without doing anything about it. If this is the case, make sure that you record in your risk log that you have considered what actions are required and have actively decided to do nothing. And sometimes it will be a positive risk and you’ll want it to happen!

Whatever the approach you want to take, it should be documented so that you know exactly what is going to be done and can track progress against it. Remember to go back to your action plans regularly and update them with what actions have been completed and what new tasks have been identified.

Mistake 3: No Risk Analysis

When you’ve got a lot of risks it can be tempting to skip the analysis phase and not spend time working out which area of the project it will impact or how serious the problem will be if it happens. You shouldn’t do this – it isn’t appropriate to treat every risk in the same way and you’ll only know how much time and effort to invest in addressing it if you properly carry out some analysis to assess the impact and likelihood of each of the risks.

Review each risk and establish how likely it is to happen, and what impact it will have on the rest of the project if it does happen. Get the whole team involved as they will probably identify other impacts and have some useful information to feed into the analysis exercise. This will enable you to focus your risk management budget in the right places by targeting the most serious risks first.

Mistake 4: No Timescales

When do you need the risk resolved by? Or when will it stop being a problem if nothing happens? Risks don’t last forever, so you should also be recording a timescale for the risk in your log.

For example, if there is a risk of bad weather delaying the delivery of some equipment to your building site, then this will pass on a particular day – the day that the equipment is due to be delivered. If you don’t note down this date in your log and then update the risk entry once the date has passed you could be including the mitigation plans or reporting on this risk for far longer than you really need to. Also make sure that any actions related to your risk management plans have dates against them.

You’ll want to monitor that they are being dealt with in a timely manner so you can be sure that enough appropriate action has been taken in time to offset any impact should the risk occur. Otherwise you may be working on actions and find that you are too late!

Mistake 5: No Risk Priority

Use your risk analysis and timescale information to give each risk a priority. Those that are likely to have an impact quickly are obviously more important to deal with than those that may not cause any problems until next year. Those risks that will have a huge impact are more important than those that won’t cause many issues.

Each risk should be given a priority and then you can tailor your work plans to ensure that the important ones are dealt with first. You can also use risk priorities for reporting purposes as generally stakeholders will only be interested in knowing more about the high priority risks. You won’t bombard them with information about all risks if you can tailor your reports to only give them the most important data about the highest priority problems that the project is facing. “Thanks for these pointers,” my colleague said. He had made lots of notes and went away from our mentoring session feeling a bit more confident about handling risk management on his project (or at least, I hope he did).

What other mistakes have you encountered when it comes to managing risk? Let us know in the comments below if you are prepared to share your experiences!

Source: http://www.projectmanager.com/5-risk-management-mistakes-avoid.php