NUS-ISS lecturer, Richard Tan (in photo below, teaching a session in NUS-ISS Learning Day 2015), outlines five golden principles for successful project risk management.
Project management is an important discipline in the corporate world. It provides a structured and methodical approach to guide projects from start to finish by enabling organisations to plan, organise, motivate and control their resources to meet specific goals and outcomes.
In the course of the many years of working experience and from lecturing at NUS-ISS, I have found that most project management practitioners are adept and disciplined with the key phases of project implementation. However, that does not tend to be the case when it comes to planning and managing project risks!
Rather than proactively identifying, assessing and planning for appropriate risk responses, teams here are more likely to take the "reactive" approach when dealt with conditions or circumstances that could potentially challenge or impair project outcomes.
There are critical advantages to be gained by drawing up processes to deal with a project risk, which the Project Management Institute defines as an "uncertain event or condition" that could have a positive or negative effect on one or more project objectives, such as scope, schedule, cost and quality.
Active risk management at various project stages will allow project teams to better manage the concerns and expectations of their stakeholders - which includes not just the business users, but also, the team members and third-party vendors.
What are some common project risks?
There are many factors contributing to project risks. These range from resource and manpower issues, to scope creep, technology platforms, changing environments, business competition and unclear requirements. Making assumptions, or the tendency to rely on guesswork, is another common mistake when it comes to managing projects.
At NUS-ISS, project management course participants are exposed to models and frameworks for tackling project risks. As part of our training roadmap, project management practitioners are equipped with valuable insights to start up, plan and control projects, as well as to engage and manage stakeholders.
Being aware of the areas to focus on, project teams are better able to anticipate the risks and prioritise the resources for successful project execution.
How to eat an elephant? Take one bite at a time.
One of the ways to manage risks effectively is to deconstruct or breakdown the risks into smaller chunks so that it becomes easier to identify the root causes, and to develop strategies and action plans to monitor and control these factors.
In Singaporean terms, here are the Five C's of good project risk management:
- Communicate - No one likes surprises when it comes to managing risks, so it's always a good idea to exchange information and ideas, discuss the action plans and engage all stakeholders on risk decisions to be taken. Besides, regular communication encourages positive relations within the team, while building trust through transparency.
- Control - Staying on top of a project requires conscientious efforts at monitoring work progress, identifying threats, developing contingencies and implementing swift corrective actions. Having the right level of project control enables teams to manage and mitigate the cost factors, quality and other issues that could impact a project.
- Clarity - In the urgency to get things done, it can be tempting to dive into execution without a clear definition of the project parameters, goals or outcomes. Ask questions to help everyone understand the alignment between the project and business objectives. Simplify lofty missions by getting project sponsors to describe what success looks like.
- Choice - Making informed risk decisions is critical to project success. This depends largely on the availability of information within pre-existing conditions and constraints. There are processes available to help project managers arrive at rational decisions on various risk aspects - these can be applied throughout the lifecycle of a project.
- Culture - In today's world, project risks can be exacerbated by geographical and cultural differences. This is also true of project work that is outsourced to external vendors. Take the initiative to understand one another's priorities, motivation and working styles. This could greatly minimise uncertainty and alleviate possible conflicts.
Richard Tan is a member of the NUS-ISS Project Management practice. An industry veteran with over 26 years of experience, Richard also served as CIO for NUS-ISS from 2007 to 2013, and was previously involved in strategic planning, business and technology innovation and transformation. Richard can be contacted at +65 6516 8555 or isstmhr@nus.edu.sg.
To learn more about Project Management courses at NUS-ISS, click here