Enterprise Risk Distribution
Andy Jordan is President of Roffensian Consulting S.A., a Roatan, Honduras-based management consulting firm with a comprehensive project management practice. Andy always appreciates feedback and discussion on the issues raised in his articles and can be reached at [email protected] Andy's new book Risk Management for Project Driven Organizations is now available.
Risk means different things to different people. For project managers, we tend to think of generally negative [although we remember A Guide to the Project Management Body of Knowledge (PMBOK® Guide) definition that it is merely uncertainty] items that may prevent us from delivering our project and require one of four different management approaches.
For finance departments, risk is almost exclusively a money thing; and for executives, it’s about decisions that can have a significant impact on the organization’s future. Those different perspectives can make conversations about risk management challenging as we need to ensure we are using “common language,” not just the same words.
As portfolio management and benefits-focused project delivery are becoming more important, project managers are increasingly finding themselves having to broaden how they think about risk. Portfolio management is focused more on business risk than project risk, and that has implications for project managers.
A full analysis of all of those implications would take a book (now there’s an idea), but in this article I want to look specifically at the role risk plays in project selection and portfolio definition. This may seem like an issue that is more relevant to executives or portfolio managers than it is to project managers, especially when PMs are often not …
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