Risk Management Mistakes
Risk management is one of the most critical functions that every project manager (at the project level) and every business leader (at an organizational level) must focus on. This helps steer the project or organization away from possible disastrous impacts—and toward success.
A recent example that comes to mind is that of Nokia, a company they enjoyed a fair share of dominance in the mobile phone market until its fall in 2014. Nokia lost the smartphone battle because “divergent shared fears among the company’s middle and top managers led to company-wide inertia that left it powerless to respond to Apple’s game-changing device.” Apart from other external risks, “organizational fears were grounded in a culture of temperamental leaders and frightened middle managers, scared of telling the truth.”
There are many examples of corporations and projects where—in an effort to avoid a few irrational, unimaginable consequences—project and business leaders resort to risky solutions. They don’t mitigate any risk, but rather multiply an existing one. In Nokia’s case, the failure was due to delays in rolling out a competitive product. To avoid this risk, a sense of false reporting so strongly inhibited employees that they developed a shared fear. I see it as a risk leading to another major risk.
In this article, I will
Please log in or sign up below to read the rest of the article.