Managing project risk might be the most important responsibility in project management. Risk management is often overlooked. Usually people think about things like communication, organization, and interpersonal skills as key aspects of project management. While these are important, if I had to pick one critical skill for project management, I’d have to say managing project risk. Every project comes with risks and if you don’t plan for them, you’ll spend all your time putting out fires. To manage project risk, you must be proactive, not reactive. I’ve found that the best project managers are always looking out for risks and they have a natural sense for identifying them.

Managing Project Risk

Project risk is defined by PMI as, “an uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives.” Risks are the unknowns, and a good project manager is like a lookout person for a ship, scanning for risks. They are using their binoculars to see any trouble in the waters ahead.  Not only are they on the lookout for trouble, but they also are planning to deal with it.

At the beginning of a project, and all throughout the project, it’s the job of the project manager to identify and manage risks. This is done through analysis and talking to key stakeholders and team members on the project. The project manager needs to question everyone and ask for risks that others know about.

The project manager then needs to access the likelihood and risks to address. After determining what risks to address, the project manager needs to determine what action to take for the risks.  Part of the mitigation plan usually involves setting aside some contingency funds for risks.

Ask yourself and your project management team, are you doing a good job of managing project risk? Project managers should devote a good portion of their time to managing project risk.

 

About the Author: Mike MacIsaac is the owner and principal consultant forMacIsaac Consulting. Mike provides leadership as an IT Project and Program Manager as well as an Agile Scrum Master. You can follow Mike on Twitter@MikeMacIsaac or subscribe to Mike’s blog