Why Project Risk Management Strategies Often Fail
Project risk management strategies are cautiously considered in organizations. Most of the companies are realizing the importance of this practice for project success. But often recommendations towards project risk management strategies face pessimistic attitude, resistance to change and unfavorable approaches. There are many factors which curtails the role of such risk management.
Team attitude towards project risk management strategies
Many practitioners feel that risk management processes are costly with respect to time and money. But when an unexpected even happens, the project either fails or a series of valiant efforts and activities will be essential to avoid a serious crisis situation. Studies and observations have proved that reactive methods are more costly than the standard risk planning and management practices.
Lack of accurate data
Historical data is a key component to plan for the risks. But in many cases the teams’ faces issue like data might not be easily available, gaps in the information and so on. As reported by a leading website in December 2014, “A new survey by the Economist Intelligence Unit reveals that more than half of risk and compliance executives at retail, commercial and investment banks around the world say they have insufficient data to support robust project risk management strategies.” Many industries are citing similar issues, but ideally the whole risk management plan need not be abandoned. Available data will always be useful to some extent and it is always better to make a start and progress gradually.
Lack of conviction
Many project management professionals are not well aware of the tangible benefits of project risk management strategies. There are many write-ups and journals on risk management, but many team members consider them as academic information. There is a very urgent requirement to demonstrate the importance of risk management with real life examples. It is also critical to note that risk management can bring in the required benefits only if carried out systematically with consistency.
Sensitivity
Risk managers are often seen as a carrier of negative messages. Many feel threatened and discouraged about the outcomes. The practitioners need to understand that a good risk management approach presents both opportunities and challenges. By preparing themselves to face what lies ahead, the team can guarantee successful project completion. It is not the project uncertainty but the lack of steps to prevent it, which brings in trouble.
The project teams have to start treating risk management as one of the most effective tools for project success. A change in the mindset will bring about the right actions from the team. There should be an atmosphere where risk can be foreseen, possible effects are thought upon, opportunities are established and proactive plan is supported. The team should be constantly inspired to think on ‘what – if’ scenarios throughout the project.
Risk management need not be complex always. It can start with a simple excel sheet which has the basic details like the risk, type, effect, time/the stage at which the risk is expected, actions to be taken, RACI (responsible, accountable, consulted, informed) details, deadline, review dates etc. This list can be a master tool which helps the project team to keep an eye on the opportunities and challenges. Information from past projects, inputs from the stake holders etc can be valuable assets to complete the risk analysis.
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