Risk Management for those who think they know what they're doing

[reposted from my yahoo 360 site 5/29/06]

Yes, it hurts.

Risk Management has got to be the most misused, mishandled, and misguided activity done by Project Managers. A lot of it has probably got to do with the fact that although risk management is often deemed important, the positive outcome of proper risk management has never really been appreciated. On the other hand, poor risk management results in disastrous, fire-fighting mode, call in the big guns, why didn't you anticipate that, type of remarks from Management. Often, everything is just hindsight. A reactive rather than pro-active approach.

A good doctor is one who can cure his patients. The best doctor is one who can keep them from getting sick.

The same is true with doing risk management.

Some common pitfalls on Risk Management include:

• No continuous monitoring and identification of Risks. A risk can pop-out anytime during the project. Sometimes, it can even come out because of responding to other risks. A major pitfall for Project Managers is that after identifying the risk, they just let it stay there and not do anything about it. The question a PM should ask to himself is that "What have I done about this risk?"
• Knowing that any change involves Risk. Every single change in the project (which always happens) involve some form of risk. In light of change management, risks should always be considered as a factor for approving changes in the project. There are (a lot of) times that Project Managers do not realize that changes involve risks as well.
  Realizing that risks grow into issues. This is what the Project Managers are supposed to avoid and is the very purpose of doing risk management. In some instances however, risks are accepted in the project and thus are non-issues.
• Planning for Risks. One way of pro-actively addressing risks in a project is by planning for it. A Project Manager cannot blindly say that "my project does not have risks since it is very small." I have seen projects that - specifically because they were very small- were oftentimes overlooked for risks. The sad part about that was that these projects at times cause the biggest problems since no amount of risk managment was done on it and results were catastrophic.
• Knowing that the hardest part of Risk Management is identifying the risk. Oh yeah, baby - this is the truth - and I really saved it for last. Qualifying-Quantifying risks are easy; and so are creating responses from them. The hardest part of risk management involve knowing what are all the risks to the project. For Project Managers to do that, they have to:
• Know what a Risk really is
• Look at projects from all - and I mean ALL angles - in order to find them
  

These are but a few pitfalls of Project Managers when it comes to Risk Management. There really are a lot more - but these are the ones I encounter the most with Project Managers who think they know what they're doing. I'm not being brash - it's just that some people need to realize that Risk Management is not just some buzz word they can throw around thinking that its an inherent thing to do in Project Management.

But how do you do proper Risk Management?... I'll put that one up on my next post.