How Aware Are PMs of Strategic Risk?

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 Management   Strategy  

PMI recently published a report on strategic risk management. I’m going to look at some of the points raised in other articles, but here I want to take a step back and consider enterprise or strategic risk management as a concept. In particular, I want to look at the degree to which project managers are aware of that concept, and what work they undertake to support it.

Of course, there are many variations across industries, organizations and individual PMs; but generally speaking, I think that there is room for improvement in how project managers think (and act) around strategic risk management.

In fact, if I’m honest, I don’t know many project managers who give it a lot of thought—at least not beyond the theoretical.

PMs and risk management
If you ask most project managers to talk about risk management, you’ll likely get responses that are focused on identifying, assessing and controlling the threats (negative risks) that have the potential to impact their project, with a primary focus on the impact to schedule and budget.

That’s not wrong; most of the risks that impact projects are threats, and they do have the potential to impact the timeline and the costs. However, it’s not enough.

In recent years, project managers have started thinking more about the business context of their initiatives. PMs understand that their …

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