The project team faces internal and external risks that they must first understand and then work with the PM to manage. The external risks are relatively self evident. The project must deal with vendors, market conditions, weather and all things that are outside of the business entity where the project is being executed. The internal risks are more sublime and need a seasoned PM at the helm to manage these types of risks. The internal risks can encompass the following types:
- Internal Resource Issues. This is one of the most common internal risks. The resources that you have either picked or have been assigned can quit, become sick or just decide they do not believe in the project and intentionally of un-intentionally reduce their productivity. This reduction in effort directly correlates to the loss of creativity.
- Internal Politics. This risk is the one where the novice PM has the most difficulty with in the execution of the project. In today’s economy, with current downsizing and double digit unemployment, people are sharpening the“knifes and do not hesitate to use them when the times get tough. The politics played will directly impact all team members due to the fact that a team member now needs to think how someone will react if politics is in play.
- The “Head in the Sand Mentality.” This is the one where the PM can quickly do something about to ensure it is mitigated. In most environments senior management is knowledgeable in risk but in most cases is not well schooled in the intricacies of project risk. This lack of subject matter expertise ultimately trickles down to the everyday project staff. The staff sees senior management not taking risk so they follow it and creativity takes the hit.
- The “Misc” bucket. This is the catch-all bucket where the PM has to deal with internal styles of senior management, general sales issues that are impacting profitability, rumors, and general ebb and flow of the business.
The PM needs a suitable action plan to anticipate this risks and also deal with the other risk areas mentioned above.
PM Risk Action Plan
- The PM needs to be fully accepting of being not only a project manager but a risk manager. There are too many seasoned PMs that not do not understand risk but even when they do they only utter the risks with the lights out!
- The PM needs to discuss openly with senior management the construction and implementation of the risk management plan. The senior management needs to be assured that risk spots are being identified, managed and closed aggressively. There needs to be some level of agreement that the team will take on risks to increase ROI and these risks will be monitored and reported. This senior management compliance then needs to be communicated to the whole team that risk, although a four letter word, is not something to be totally feared
- The PM then needs to educate the team, the whole team, on risk. They need to use qualitative methods to identify, capture, manage and report risk. The idea of " what I do not know is what scares me" is very true here. The team members will slowly unleash the non-creative chains once they realize they have seen a risk trigger or are in a risk area. The knowledge is power rule then overtakes the risk adverse team member.
- The risk register that was formulated in the identifying risk exercises needs to be reviewed at each team meeting. The team should actually celebrate a risk encounter and the successful navigation out of the mind field. Once people see this happen they will internally calculate that being more creative is a good thing.
- The PM then needs to wrap in the results of the risk register to the lessons learned and ensure it is presented to all team members and stakeholders.
There are obviously extenuating circumstances with each project when dealing with risk The key environmental variable is that you must assess the risk culture before you start the project, continue to assess once the project is being executed and reinforce the results at all levels at the end of the project.
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Jim Hannon has over fifteen years of diversified experience in the Information Technology and Financial Services Industries, functioning primarily as a Senior Project Manager/Lead Business Analyst/Program Manager with proven experience in trading systems and numerous financial applications domestically and globally.
Jim currently holds his MBA, PMP, PM-RMP and is certified in Prince 2 fundamentals. Jim is planning on sitting for the PgMP and PM-SP in the next 6 months. He also teaches Project Management at Boston University and Excelsior College and created the PM program at Excelsior. Jim is also a Senior Professor at Cambridge College.
Jim also has a consulting firm The Bentley Group, which offers PM and Business Analysis services.