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Why You Need to Identify Major Risks Present In Your Project

April 17, 2012 | Comments: 0 | Views: 184

A few days ago, a senior manager asked me why I spent so much energy and effort on identifying risks associated with my project. He felt that I was being negative. He felt that I should be focusing on the positive. All I needed to worry about was the tasks I needed to get the job done. And to a certain extent, his reasoning was valid.

Risk management is one of the biggest tasks when developing a project plan. It involves a great deal of time and effort to identify the major risk events. It involves a great deal of time, effort and frustration to determine the risk associated with these risk events. Not to mention the fact that you really can't know the answer. Normally, all you can do is guess at the probability. As for the costs associated with the risk how can you rationally assign a value to a risk event that will destroy your project? About the only good thing that can be said about calculating the effect of the risk event is that it's easier than determining the probability!

So why do you need to identify the major risks present in your project?

Why bother?

As a PMP or Project Management Professional, I couldn't actually do as he suggested, of course. However, we do often become locked in doing things simply because they have always been done. It's always a good thing to question our reasons. And his questions deserved a fair and thoughtful response. At worst, you'll reinforce the validity of doing the task and at best, you may find a simpler, easier way of accomplishing the same objectives.

We all know that risks events are as dangerous as presumptions to our projects. But there needs to be a greater reason for spending so much time and energy on risk management. Here are five overwhelming reasons that we need to perform risk management in a systemic and comprehensive way.

1. We Need To Be Aware

One of the biggest reasons is that simply we need to know what risks we are facing. Otherwise, we will be blindsided if they occur. Without warning, our normal human reaction will be to ignore their occurrence. And that reaction is almost always fatal.

2. We Need to Be Vigilant

Risk events almost without exception give some warning that they are occurring. This warning can be enough to react successfully. But to be aware of the warning, we need to be watching for it. And that means we need to perform tasks specifically to alert us when the risk event is occurring. Those tasks need to be included in the task list for our project.

3. We Need to Be Ready

One of the characteristics of surviving a risk event is the speed of our reaction. The faster we react, the better. Having a plan in place to reduce the effect or take advantage of the effect, can speed up our reaction time immensely.

4. We Need to Prioritize

There is a limit to how many balls we can keep up in the air at one time. Try to juggle more than that limit and disaster results. Identifying our risk events in advance allows us to watch only those that matter. We keep the less important balls in their case and out of our awareness.

5. Include the Cost

If you stand in front of the plate often enough eventually you are going to be hit by the ball. It's inevitable. Maybe not this time. But eventually. That's the nature of a probability. Not only is there a cost that the project needs to absorb -- for monitoring and so on, but there is a cost that the organization must absorb. Think of it like insurance or an emergency fund. No one project may spend its allowance. But over time, you know one of the projects will spend the whole amount and you need to be prepared.

Do you want to read more free information like this? Visit us at and read our blog. While you're there check out other articles by Glen Ford

Or check out my newest book available on Amazon at

Glen Ford is an accomplished project management consultant, trainer and writer. He has over 20 years experience as a project manager in such diverse projects as Construction, IT, Software Development, Marketing and Business Startup. He is a serial entrepreneur who quite literally learned to be an entrepreneur at his great-grandfather's knee.

Source: EzineArticles
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