Risk Is a Four-Letter Word, But Denial Is Our Biggest Enemy

As a practitioner and proselytizer of project management for over 38 years, I've been puzzled by one thing above all others. That one thing is this: Why is risk management virtually ignored as an integral part of the project management process?

We all recognize that risk is an important part of all projects. If we think about it, we all acknowledge that the management of risk can be the most critical factor in project success. Yet, as I look at the practices that have been put in place in most firms and at the tools that are being used to support these practices, I find that risk analysis and risk management are most often missing.

It's not that the processes and tools are not available, but that there is a lack of interest in the process. I can provide two stories that might help explain the perilous avoidance of this essential practice.

A company decided to enter into a new business segment. As was standard practice for this well-managed conglomerate, a business analysis plan was prepared to evaluate the potential profitability of the new venture. As a normal part of the business plan procedure, three business cases were analyzed: the most probable case, a potential upside case and a potential downside case. All well and good up to here. But then the general manager, while presenting the business plan to the board, said this:…