4 Best Practices for Reducing Project Risk
An effective risk management program is essential to modeling and reducing risk for your project. If you fail to create an accurate representation of the potential risks to your project, your project will be more likely to incur delays and additional costs, if not fail entirely. However, you can reduce risk to your project by following a few best practices.
1. Consider Political Influences to Your Project
Depending on where the project will take place, your project may be susceptible to changes and influences from political climates. You should always include political influences in your risk model.
Furthermore, you should create a risk management plan for this specific influence and include how your organization will meet changes in political requirements for your project.
Similarly, environmental influences can be considered political since political entities are often responsible for the oversight of environmental regulations. As a result, a risk model should consider how the project will impact any potential factor, such as the environment, politicians, economies, and more.
2. Include Risk Model as a Risk
Risk models are designed to consider all the potential problems a project could encounter. However, few risk models consider the risk of risk within the project. For example, the risk for dozens of small problems could result in an impact as large as the risk for a major problem. Essentially, a project manager must include the risk of an incorrect risk assessment, management, and mitigation plan for a given project. This helps to give project managers an inside perspective of how risk will affect a project, which helps to increase efficiency and productivity.
3. Define a Project’s Plan, and Monitor the Schedule for Deviations
Sometimes, the definition of a project will change, or increase in project scope. However, the impact of these increases in scope cannot be accounted for if a project was poorly planned. This may include failure to understand the project’s requirements, such as planned completion date, budget availability, and overall goal of the project.
Additionally, project managers consider how the schedule will change as changes in project scope occur. This where a recurring risk assessment and management model comes into play. If a change project scope occurs, the change should be included in the date for creating a risk model. Therefore, the risk can be incorporated into the remaining schedule of the project, and project management team members can determine the best way to achieve the new requirements at the same time as maintaining the previous standards.
4. Involve Stakeholders in Risk Assessment
Stakeholders have a vested interest in ensuring the successful completion of a project. As a result, shareholders will be apt to provide input on potential risks to a project. For example, shareholders in country A may have expertise in assessing the political climate of the area. Furthermore, shareholders in region B may understand how local residents will respond to the project.
Essentially, shareholders should be included in brainstorming sessions to identify the potential risks to your project. Therefore, you can ensure all of your risks have been identified to the best ability of all team members, including executive-level members.
Thousands of risk management model exist to help a project manager mitigate and manage across a project. However, each of these models includes several similar factors. By considering these factors, you can ensure your risk model will provide comprehensive insight into the potential threats to you project.
Key Things to Remember
- Combine political and environmental risk into one category for your risk model.
- Include the risk of an incorrect or inaccurate risk model in your model.
- Define project scope before beginning a project.
- Ask for stakeholder input in assessing and managing risk.