Risk Management: A Critical Component to Successful PM
Risk management is often discussed, but it is amazing how few project managers truly embrace the process. Sure, they think about project risks and the like, but too few really create a risk management plan and process for monitoring and managing it. Maybe this is due to a false sense of control, or perhaps a lack of understanding on how to formalize a risk management process into project work plans and project communication plans.
Regardless of the reason, it is good for project managers to understand that it is expected and incumbent upon them to identify what events or situations could derail a project—and then to develop mechanisms to continually monitor, assess, respond and mitigate risks in a way that safeguards the organization’s project assets and achieves the organization’s project goals.
This article presents an overview of risk management in context to project management, and shares some guidance on the components that should be considered when implementing a risk management process framework.
To begin with, it is important to note that the definition of risk varies slightly between sources. Mirriam-Webster defines risk as “the possibility that something bad or unpleasant (such as an injury or a loss) will happen.” The Business Dictionary goes a little deeper: “A probability or threat of damage, injury, liability, loss or
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