Risk Management

7 Steps You Are Doing Wrong in Risk Management

If you want your projects to be free of risks and issues, risk management is the only way. However, several teams keep the least amount of time for risk planning. In this article at Project Smart, Kareem Shaker discusses 7 steps that you are doing wrong in risk management.

Risk Management: 7 Steps to Avoid

To maximize benefits from the investments and send successful deliverables, perform risk management at every step of the way. Following are the 7 steps that you are doing wrong in risk management:

Not Aligned with Enterprise Risk Management: An ERM monitors processes, frameworks, and methodologies to detect and mitigate risks across the organization. If you are unsure how project risks can affect an enterprise, consult your chief risk officer (CRO). Build the risk management plan that aligns with your ERM.

Unfinished Risk Breakdown Structure: A risk management team uses RBS to find out large risk potentials. It also helps to get stakeholder buy-ins by showcasing all the risks that a project can experience in its lifecycle and create transparency. Also, RBS is project-specific so customize the template as per your needs.

Opinionated Risk Identification: Different stakeholders will point out different risks. It is the job of the actual team to identify the real risks. Sometimes, finding out the actual problem gets your job done. Forget subjective opinions and look at the risk management process from an objective point of view.

Hurling All Risks at Project Manager: It is indeed true that project managers are the problem-solvers of the team, but they cannot do it all. The risk management team must set responsibilities for all SMEs, stakeholders, clients, sponsors, and teammates. Create a RACI matrix to help the team visualize their roles better.

Ignoring Benefit Cost Analysis: You cannot remove all risks, so you need to adjust with some. When the first 3 response strategies—avoid, transfer, mitigate—do not work, you must accept the risks. The second reason for accepting risks is when the benefit is far more than the cost incurred.

Random Use of Contingencies: After project managers revise the project plan several times, you can create the contingency plan. Unplanned risks, however, cannot fall under contingency plan but a management reserve can answer to that.

Assessing Just Once: Risk management plan must be updated continuously as new risks evolve over time. Project managers should inculcate a habit in the team to constantly evaluate risk management during the entire project lifecycle.

To view the original article in full, visit the following link: https://www.projectsmart.co.uk/the-seven-deadly-sins-of-risk-management.php

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