Risk management is serious business, because the bigger the project flop, the bigger the repercussions for everyone caught in the ensuing splash. As Matt Driscoll writes for the Risk Management Monitor, risk failures even helped result in the 2008 financial crisis. If some of the biggest banks are capable of such damaging goof ups, is there any hope for the rest of us? Of course, and Driscoll relates three problems that the next generation of risk managers needs to better address:
- Unknown unknowns
- Lack of data
Getting it Right Next Time
Unknown unknowns are the most insidious variables in risk management; they are the risks we cannot predict and are not even aware exist. But on the plus side, there do exist things as positive risks, and these can come in the form of unknown unknowns too. So take the good with the bad. Otherwise, the only thing you can really do about unknown unknowns is to be aware that they can occur, and build some additional time into the project schedule to account for them.
Next up is lack of data. Driscoll writes that many project risks are conceived through use of historic data, which is not always pertinent and applicable to what is going on right now. Skewed data produces a skewed perspective of risk. I would recommend using knowledge management to create a growing body of known potential risks for given types of situations within the organization.
Lastly, there is intimidation, about which Driscoll writes:
On a very basic level, it can be quite intimidating to think about the number of risks that a project might possess, and risk managers can be concerned about seeming overly negative, affecting people’s opinions of the project and potentially the methods and processes used to complete the project. One might argue that if someone lacks this kind of forthrightness, they should not be involved in project management, but it is a weakness that has to be legislated for.
In other words, risk managers need to sound more like guardian angels than the Reaper in order to be effective. But then again, if the Reaper shows up at the office, you would think everybody would be listening to his advice extremely closely.
You can read the original post here: http://www.riskmanagementmonitor.com/why-arent-we-performing-risk-management-well/