projectmanager.com.au projectmanager.com.au

5 reasons why opportunity should be part of your risk management

Many of the pieces are now in place to support widespread adoption of inclusive risk management that addresses both threats and opportunities. International standards define risk as double-sided, and this is supported by professional bodies, recognised thought leaders, expert practitioners, and leading-edge organisations. All that’s needed is for more people to start doing it! But why should we? Here are five...

projectmanager.com.au projectmanager.com.au

Demystifying quantitative risk analysis

Many people view quantitative risk analysis with a mixture of fear and awe. It’s clearly a very powerful technique in the risk professional’s toolkit, but it seems to be hard to use. As we decide whether it’s appropriate for us to include quantitative risk analysis in our risk approach, we should consider the strengths and weaknesses of this technique, so that we can make a balanced judgement. Using quantitative risk analysis has...

projectmanager.com.au projectmanager.com.au

The secret of risk-based decision-making

The idea of ‘risk-based decision-making’ is becoming increasingly popular, and decision-makers at all levels are keen to ensure that their decisions take risk properly into account. But perhaps the term ‘risk-based decision-making’ is mistaken. Surely all decisions are risk-based, by definition? Whenever we encounter a situation where we need to make a decision, two vital characteristics are always present. Every decision...

projectmanager.com.au projectmanager.com.au

Providing risk infrastructure to support opportunity management

Failure to provide an appropriate level of risk infrastructure can cripple risk management in an organisation. Too little support makes it difficult to implement the risk process efficiently, while too much infrastructure adds to the cost overhead. Getting the supporting infrastructure right is essential for effective risk management, enabling the risk process to deliver the expected benefits to the organisation and its projects. This...

projectmanager.com.au projectmanager.com.au

How to choose the right risk tool

The risk process produces large amounts of data that are needed to support analysis, reporting, decision-making and action. Tools can help us to manage these data efficiently. But there are many alternative risk tools, so how can you choose the right one for your needs? The following factors should be considered: User base. Ask potential users of the risk tool what they need. Consider each user group, as their needs will be...

projectmanager.com.au projectmanager.com.au

Can a risk have 100% probability?

One of the first things I learned about risk was that every risk has both a probability less than 100%, as well as an impact on at least one objective. Some of my risk colleagues talked about risks with 100% probability, but I disagreed with them. As I’ve discovered more about risk, I’ve realised that my colleagues were right! There are risks with 100% probability of occurrence. In other words, they are either happening now or they...

projectmanager.com.au projectmanager.com.au

Checking the risk process

In some businesses and projects, risk management is described as an exercise in ‘ticking boxes’. This phrase means that people just follow the steps in the risk process, but with no real commitment or energy, and no belief that it will actually make any difference. The term ‘box-ticking’ is always used in this negative way, as a bad thing to be avoided. But perhaps ticking boxes could be useful if we do it differently. The key...

projectmanager.com.au projectmanager.com.au

8 questions to process project risks

What should a good risk management process cover? Any project manager undertaking a risky or important venture should ask themselves these eight simple questions: What are we trying to achieve? What might affect us achieving this? Which of those things are most important? What shall we do about them? Have we taken action? Who needs to know? Having taken action, what has changed? What did we learn? These questions describe the steps...

projectmanager.com.au projectmanager.com.au

Using Six Value Medals to identify risk

Edward de Bono is famous for promoting creative thinking, and he has written many books to explain his radical ideas. Perhaps his best known technique is the Six Thinking Hats®, encouraging people to adopt a range of different perspectives when thinking about an issue. Indeed the Six Thinking Hats can be very helpful in risk identification. One of de Bono’s other thinking tools is the Six Value Medals™. These describe different...

projectmanager.com.au projectmanager.com.au

Kill the risk manager?

I once read an article titled ‘Ten Top Tips for Effective Risk Management’. Tip number 4 was “Kill the Risk Manager”! But the author was not suggesting that we should go out to commit murder. Instead he was recommending that the job title of risk manager should be killed off. Why? What would you expect a risk manager to do? A risk manager manages risk, of course. But this is both wrong and unhelpful. Everyone should take...

projectmanager.com.au projectmanager.com.au

How risky is your project?

Have you ever been asked “How risky is your project?” Most project managers find it hard to answer this question. Your Risk Register lists all the risks you’ve identified, and these are prioritised for attention and action, with responses and owners allocated to each risk. But how can a list of risks answer the ‘how risky’ question? We need a different concept to describe the overall risk exposure of a project, which is...

projectmanager.com.au projectmanager.com.au

Adding sustainability to the risk framework

Sustainability has become increasingly important to organisations across the world in recent years, as both a business objective and a necessary constraint. But what does it mean? And how should it be included in the risk process? The word sustainability has changed its meaning significantly over time in the business world. At first it only referred to impact on the environment. Then in 1995 John Elkington from British consultancy...

projectmanager.com.au projectmanager.com.au

A question of risk

One of the most common symbols used to represent risk is a question mark (‘?’), reflecting the uncertainty associated with all risks. Since risk is defined as “uncertainty that matters”, there will always be at least four important questions to answer about every risk: What is the uncertainty? How uncertain is it? Why does it matter? How much does it matter? But there are many other questions raised by risk, and the link...

projectmanager.com.au projectmanager.com.au

Mindfulness in managing risk

Mindfulness has its roots in Eastern religion, although it is also used therapeutically to treat a variety of psychological conditions (including anxiety, depression and stress), as well as in coaching to encourage excellence in healthy people. Used properly, mindfulness can also make our risk management more effective. Being mindful means bringing your complete attention to your current experience on a moment-to-moment basis, being...