Fighting the Fear of Risk

Purchase generic Cialis Soft 20 mg By Bob McGannon, buy Cialis Soft 20 mg Sweden PMP, GWCPM, MPC, and Principal of Mindavation

A project without risks would be a strange activity indeed. Risk is part of the landscape of organizational change, and ‘managing risk’ should be a project manager’s daily mantra. However, regardless of their best intentions to
mitigate risks involved in their projects, all too often project managers run into sponsors and/or senior leaders who hold the belief that there should be fewer risks. At the extreme end of the spectrum is the sponsor who buries their head in the sand and denies there could be any risks at all, or the senior leader who may have a pathological fear of risk. Knowing how to appropriately manage these misunderstandings and fears of risk will lead to better outcomes for the business, and for all involved in the project.

Essentially, it’s up to the project manager to take the time to see the bigger picture of the environment in which they’re operating. By understanding where each project sits on the business’s priority scale, as well as the underlying causes of the risks and how they should best be dealt with, the project manager will be in a
better position to manage some of the risks. They also should attempt to manage lower priority risks themselves before they are escalated to the sponsor.

Their aim should be to package all the information that’s relevant so that their senior leader can digest it,  understand it and make a quick decision based on that information. When the senior leader can’t make a concise decision, they will have to make an evaluation as to whether a particular risk is worth their time compared with all of the other balls they have in the air.

The project manager who prioritizes the risks, and is aware of the internal and external factors impacting their project, will receive a better response from their sponsors than the project manager who takes the Chicken Little approach, and continually makes the call that the sky is falling.

buy Cialis Soft 20 mg Canada Appropriate definitions of risk

At the most basic level, defining a risk comes down to defining the event, the cause of the event and the outcomes. Only then can a risk be addressed and mitigated from various viewpoints. Many project managers fail in their identification of reasonable risk to senior managers and sponsors because they don’t adequately go through the event, cause and outcome sequence.

Take this scenario as an example: an airline company has identified a risk of their fuel trucks not being able to make it out onto the tarmac to refuel the airplanes, causing the planes to be delayed. The project manager and senior leader or  sponsor assume that the risk revolves around the fuel trucks having a mechanical failure. So the risk mitigation action becomes, “Let’s have more fuel trucks available so that, regardless of a mechanical failure in one truck,  we will always have a truck ready to refuel the aircraft.” The project team agrees that this sounds like a reasonable risk mitigation strategy. However, during the next month, the fuel truck drivers go out on strike, and the business could have all the fuel trucks in the world and none of them would be able to show
up: there is simply no-one to drive the trucks!

In this case, it’s not that a risk wasn’t identified by the project manager, in agreement with their senior leader or sponsor. However, a fuel truck mechanical failure shouldn’t have been the only identifiable cause for the risk. A driver’s strike also would be within the realm of possibility. And while the project manager certainly can mitigate for both of the causes of the risk, they require two completely different actions and responses from the business.

So what it comes down to is this: if the required causes, actions and responses of all possible risks are identified early on in the risk analysis process, a sponsor or senior leader will be less likely to bury their heads in the sand if
and when they do arise because the full spectrum of possibilities have been considered.

Risk overload

A project manager has to be careful, however, that they choose which risks to address, and which to take to their sponsor. Often sponsors will be bombarded with myriad risks from different parts of the business. If they’re continually being presented with multiple risks for the various projects under their control, it’s no wonder they develop a fear of risk.

Too often, in our Risk Management Workshop
(http://mindavation.com.au/training-courses/project-management-courses/risk-management-workshop/)
we hear of project managers who have taken up to 30 risks to their leader or sponsor, without even thinking about the priority of the risks in relation to the bigger picture of the business. The reality is that a particular project risk may well involve a $20,000 problem, but the sponsor may have a $200,000 problem that also has to be dealt with.

On the other hand, if there are genuinely 30 substantial risks which the project manager can’t handle themselves, the question has to be asked: is this project the right project to be doing right now, and is it defined appropriately in terms of the financial and market conditions in which the project was intended to be executed.  If there are 30 high priority risks, why is the project so risky?

Making risks an ally

On the flip side, misunderstanding the complexities or constraints of a project may not necessarily be the  sponsor’s fault. They may not be aware of the risks and, when the risks do surface, they may not have all the information they need to make a knowledgeable, conscious management decision to deal with the risk. Plus,
because of everything else they have to deal with on a daily basis, they may not be afforded the time to process the ramifications of the risk mitigation decisions that need to be made on a particular project.

The solution is for project managers to present senior leaders and sponsors with concise information,  articularly when they are communicating risk mitigation strategies. A logical mechanism (such as those learned in  Mindavation’s ProgramManagement course: http://mindavation.com.au/training-courses/project-management-courses/real-world-programme-management-class) should be used to prioritize risks so that everyone on the project knows exactly when they are dealing with large risks and when they are dealing with small risks. Simply, they are packaged and treated differently. Senior leaders should only become involved in two instances: when the risks are genuinely relevant to the business: such as those centered on saving money, increasing productivity
or getting a product out to a deadline; or when only the senior leader can enact the mitigation strategy.

It’s the project manager’s duty to pay attention to the risks of their project, while keeping in mind that risk is part of the everyday landscape. They should use the status meetings appropriately to overtly talk about risks. Then, they  should align the risks to the priorities of what the business wants to either achieve or avoid with a particular project.

It really is up to the project manager to display strength and confidence when it comes to risk analysis and to have done their homework to best manage their project risks. If they haven’t had the time to do the required homework and get all the necessary information together in an easily digestible form, how can they expect the sponsor to have the time to consider risk options within the scope of what they’re trying to achieve?

The way to take the fear of risk out of a project is for the project manager to make all the alternative risk solutions as clear cut as possible. In this way, they will be showing the sponsor that they are working to increase the probability of the project’s success. Those risk mitigation decisions can then be presented to the sponsor in a direct yes or no question, making dealing with risk as simple as possible for the sponsor.

Bob McGannon is a Founder and Principal of Mindavation, a company providing project management training and consulting, leadership workshops and team building programs throughout North America, Europe and Australia. Bob and the Mindavation team can be reached by calling 866-888-MIND (6463)
in the USA or 1300 947 572 in Australia, or
by sending an email to info@mindavation.com or via the web at www.mindavation.com or www.mindavation.com.au

The Mindavation Foundation is proud to donate 5% of profits towards development of youth leaders.
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