Managing The Risk

As a project manager, there are processes to follow in order to manage risk in each project. As you move along from project to project, these processes should become second nature to you, as long as you are consistent in your risk minimization.  

The five risk management process steps include: 

It is very important to identify and understand possible disruptions to your project plan. 

The Associated Press posted a story about an attempt to erect the world’s largest popsicle in New York City. Here is the story: 

The 25-foot-tall, 17 ½-ton treat of frozen juice melted faster than expected, flooding Union Square in downtown Manhattan with kiwi-strawberry-flavored fluid. Bicyclists wiped out in the stream of goo. Pedestrians slipped. Traffic was frozen. Firefighters closed off several streets and used hoses to wash away the thick, sweet slime. The Snapple Company, a leading maker of soft beverages, had been trying to promote a new line of frozen treats by setting a record for the world’s largest popsicle but called off the stunt before the frozen giant was pulled fully upright by a construction crane. Authorities said they were worried the 2 ½-story popsicle would collapse. Organizers were not sure why it melted so quickly. “We planned for it. We just didn’t expect for it to happen so fast,” said Snapple spokeswoman Lauren Radcliffe. She said the company would offer to pay the city for the clean-up costs. 

After reading that story, there are several questions that run through my head regarding this example of poor risk management. Before you try to break a world record by promoting a new product, ask these three questions of yourself and your team: 

  1. What could go wrong? Come up with ALL the things you and your team can think of that could go wrong or change the outcome of your project. 
  2. Will the risks listed affect the project negatively or positively?  
  3. Do you have contingency plans in place? Based on the risk list you have created, set multiple responses to each of the risks. In the case of the popsicle, how will you handle the popsicle melting faster than expected? Ensuring the local firehouse is on site and having police block all foot and auto traffic to the area are just a couple of ideas that won’t eliminate the risk but will minimize the impact of the risk.  

Having a risk management plan doesn’t mean you will eliminate all potential risks from your project. Your goal is to minimize the negative impact the potential risk(s) could cause. Remember, not everyone is creating a risk management plan to erect a giant popsicle in Union Square. Your project risks could be as simple as: 

  • An error in the estimated completion of the tasks and/or full project 
  • Cost estimates are inaccurate 
  • Vendor changes scope of the project  
  • Team member promoted or leaves company 

Risk management is a proactive approach rather than reactive. When you become proactive in your project plans, you get ahead of potential pitfalls. Essentially, having a risk management plan prepares the project manager for steps to take when issues arise and gives them better control in reaching project objectives on time and within budget. 

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