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Negative risk (better referenced as threats) represents potential obstacles that can derail and impact the projects objectives. All Project Management methodologies fundamentally include their own take on a risk management process. They generally flow through identifying, assessing, and mitigating threats all with the aim to minimize their impact. Here are the essentials for managing these negative risks:
Every single threat identified MUST go through a thorough risk assessment first and foremost. This simple, yet detailed step, involves evaluating all aspects of the project. Risks can damage your project scope, timeline, budget, quality, benefits and other objectives that need to be met. Tools such as SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) and risk registers can help document and prioritize risks.
Once risks are identified, contingency plans can be developed for the associated threats. These plans outline the steps to be taken if a risk materializes. By having paperwork ready for those moments, the PM has ensured that the project can quickly adapt and continue progressing towards its’ objectives. Contingency planning involves assigning responsibilities, allocating resources, and establishing communication and work silos.
Risks evolve over time. The identification and analysis of any threat is not a singular task ready to be moved on from. Identifying risks should be at the forefront of the teams priorities on a daily basis, and analysis should be carried out repeatedly making continuous and essential reviews. Regular risk reviews allow project managers to adjust their strategies and update contingency plans as needed. This proactive approach helps in identifying emerging threats and responding swiftly.
Various strategies can be deployed to mitigate risks; avoid, reduce, transfer, share and accept. For example, risk avoidance might involve altering the project scope to eliminate a potential threat, while risk transfer could involve outsourcing certain tasks to reduce liability. There is no best approach for these strategies, but there will always be the best solution for each situation. Only you can make that decision. Having a deep, detailed understanding of these strategies enables you to make the best decision.
Keeping key stakeholders informed about threats (and the measures being taken to address them) is essential to achieving project success. Transparent communication builds trust and ensures that everyone is prepared to respond effectively should a risk come to fruition. I never recommend sharing risks to all stakeholders, but I do recommend sharing the details to those who can help or can be affected by them. Keeping key parties informed also allows for new ideas, analysis and solutions to be raised.
Over these past 2 months, I have produced 2 blogs on risk. The first on opportunities and this one on threats. It is hard to put into terms just how vast this topic is, but also just how important risk is as well. Simply, understanding opportunities and threats is integral to effective project management. Pushing for positive risks while simultaneously mitigating negative risks can shoot your projects into places you had never expected and avoid the treacherous waters of project failure. Safeguard what you have while pushing to achieve more. Balancing these two aspects of risk ensures a comprehensive and mature approach to project management.
Risk is of course a major topic on my training courses and I love taking questions on this topic. Have a question for me? Drop a comment on any of our social media channels or join me on one of my upcoming training courses. To book on, call 0800 151 0140 to discuss dates and times and I look forward to hearing your thoughts.
Having worked in the industry since 2016, Harley’s experience is vast and knowledge of project management methods is of an elite standard. He has covered a wide variety of roles in a plethora of projects and has worked with some incredible project professionals over the years; there is seldom a scenario that Harley has not encountered. Residing in Poole, Dorset Harley has specialized in maritime projects and programmes in and around the stunning natural harbour.
From project managing major yachting events, to advising on risk management approaches, the natural elements have thrown endless challenges into projects where Harley has strategically extracted the best outcomes from each scenario. These tales make up some of Harley’s most interesting examples used when delivering his training of which attendees enjoy.
SPOCE is proud to have industry leading pass rates for delegates in the PRINCE2® and APM methods which Harley has played a vital part in achieving. Starting his training career in 2019, he would run sessions such as “what makes the perfect business case?” and the much loved “PRINCE2 Practitioner exam workshops”.
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