Project Risks + Proactivity = Success

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Risk management as a best practice is critical to project success. It forces the team to consider the deal breakers on a project, and to proactively prepare and implement solutions.

PMI's recent 2012 Pulse of the Profession report found that more than 70 percent of respondents always or often use risk management techniques to manage their projects and programs and these practices lead to higher success rates.

Here's an example of how risk management could have saved a project:

A project manager oversees an electrical team that is responsible for installing electrical and audio-visual equipment. The construction and civil engineering teams hand over the completed and decorated site, ready for the final phase of the project. To the project manager's dismay, the projectors do not align with the screens, rendering them not fit for the purpose.

What went wrong?

The civil and construction teams had altered the dimensions of the rooms; the customer failed to communicate the changes to the electrical team. Assuming the project was executed according to plan, the project manger planned and submitted the electrical drawings based on the original dimensions of the room. These plans were made redundant when the room dimensions changed, which upset the equipment's position.

To correct the situation, the project manager drew and submitted new electrical drawings. The site's walls and ceilings had to be reopened to accommodate the changes, which caused delays and increased cost, rework -- and frustration.  

Had there been a robust risk identification and implementation plan, they would not be in this situation. Too many assumptions were left unchallenged and risks pertaining to the many external dependencies were overlooked.

As part of this risk management, proactive communication with the customer and other teams should have been planned. For example, the project manager should have considered and asked questions about how the contractors and sites would be monitored and controlled. What would the frequency and type of communication be like with stakeholders?

There should have been an assessment of 'what if' scenarios. What happens if the deliverables are not as expected? What are the risks if there are problems with contractors? What is the impact of not having dedicated resources on the team?

These types of discussions and questioning would have alerted the project manager and team to proactively plan to manage the quality of contractor work and employ the necessary resource on the project team.

Do you practice risk management? How does risk management planning make your projects successful?

To discuss Pulse of the Profession on Twitter, please use #pmipulse.

See more on the Pulse of the Profession.

Posted by Saira Karim on: July 03, 2012 12:11 PM | Permalink

Comments

Aly
Hi Saira - I work for a risk analysis software company here in Houston, TX. As project managers ourselves, we understand just how important it is to be able to identify and plan for certain risks and variables. A more accurate understanding of project risks and their potential effects is essential to a successful project. At the very least, risk analysis gives you a more realistic timetable for project completion which, in turn, increases your chances of a successful project completion. Anyhow, thanks for sharing! - Aly

Mounir Ajam
Saira,

This issue is a failure in configuration management. Since configuration management is about ensuring that all team members working of the same "up to date" drawings and design specifications.

Now one (or many) risk on projects could be related to project management failure.

Since project and risk management are being proactive -- preventive -- we should follow proper project management practices so PM activities (or lack off) do not become additional <<<< self created risks >>>.

Mounir Ajam
Another comment --- risk management must be a common practice and not a best practice. Advance risk management maybe a best practice.

We should move away from using the word "best practices" for things that should be done as basic ... and risk management should be a basic / common practice in all of our decisions.

Saira
Thanks Aly & Mounir for your comments,

There are many lessons and discussions to be drawn from this project. I completely agree Aly, that many of the problems could easily have been avoided had their been 'a more accurate understanding of project risks and their effects'. This would certainly have led to better project management practices in all areas, including configuration management as you rightly identified Mounir.

Mounir - I somewhat agree with what you say, this project manager was following the organisations 'common practice', again it comes down to project management maturity. Please take a look at my July 2011 post titled 'Best Practices in Project Management or Better Practices?' there is a good discussion on this that you may find of interest.





Todd
Great article. Good risk managment is very important. In my experience, things can go really wrong when PM's fail to do proper risk management and implement proper risk responses. Risk management is absolutely critical to the success of any project - it separates true project managers from just people who coordinate certain aspects of a project. Thanks.

Charles
Good post. I don't think the issue is related to Risk Management but you are right that if good RM practises were used like PERT (Program Evaluation) then perhaps could of been avoided. The message is understood though. Employing a change management process could have included a process to inform all parties and identify the risk and impact of changing a design.

Loren Padelford
Hi Saira, Great article. The importance of risk management in project management can not be overstated. Successful projects have effective risk management as a core function. I think there is also a component here that is not mentioned, which is in major projects risk management is not only about identifying and managing your potential downside, but done properly, risk management can significantly improve opportunity identification and exploitation. Risk management is a two sided sword, on one side you have value protection, and on the other you have value creation. Effective project and portfolio risk management is as much about taking risks as it is about managing them. Loren @ERMStrategy

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