We’ve all been part of a project where risk management is heavily explored and evaluated at the beginning of a project and then never discussed again. It’s an all-too-common practice among teams, but unfortunately, it’s one that puts projects at risk and keeps teams from performing at their best.
To help leaders avoid this pitfall in the future, we’ll look at why risk management needs to be embedded in your project culture and provide tips for how to do that.
Appreciating the Importance of Risk Management
Before diving into ways to make risk management part of your culture, it’s worth taking a moment to highlight exactly what risk processes are and why they’re more than just an exercise at the beginning of a project.
At the most basic, risks are any occurrences that can impact a projects objective. It is a common misconception that risk is only concerned with unwanted or negative impacts, termed threats. However, risk should also include opportunities to improve the project outcomes. While all projects involve unexpected events, most risks can be controlled, mitigated, or in the case of opportunities, exploited through effective risk management.
Risk management simply involves identifying, analyzing, and mitigating project risks. As part of an effective risk management practice, leaders will create an action plan that provides a step-by-step guide to remove or control risks. The plan should identify risks, both small and large; analyze the probability of occurrence; determine the potential impact; and offer proposed actions to address the issue.
Effective risk management processes often make the difference in determining whether a project succeeds or fails. They also are key in avoiding the potential big disasters in project delivery that keep leaders up at night but also highlighting the opportunities that can positively influence the project outcomes.
And, besides the key benefit of increasing the likelihood of project success, good risk management practices help reduce expenses, keep projects on budget, increase accountability, and give your team a competitive edge.
Risk Management Is Ongoing
Given the nature of risk management, for practices to be effective, they can’t just occur at the beginning of the project. Instead, the plans need to be infused throughout a project, helping to prioritize and adjust tasks from beginning to end.
Consistently evaluating risks throughout a project helps ensure your team stays proactive about issues as opposed to constantly responding to crises. Additionally, it ensures that you’re applying contingency plans and risk-mitigating steps in a timely manner and not waiting too late to address issues. It is also imperative that any realized risks are removed, and emergent risks are included to keep risk management an active part of project delivery. Risk Management should never be static. This way risk management can become embedded in the culture of the organization – it will always be at the forefront of delivery teams minds.
It also helps with decision-making. When all parties are consistently evaluating and analyzing risks, there’s more data, a deeper understanding of issues, and less uncertainty. Once your team starts making decisions – big and small – with risk considered as an issue, you’ll see improved results and better decision-making.
Finally, yet importantly, making risk management a part of your ongoing practices helps you learn from mistakes and ensures that you’re constantly improving from project to project. Upon project delivery, teams should evaluate how their risk management practices reduced their exposure to issues and where they could have been more effective. This will help you to consistently refine and improve your processes.
How to Build a Risk Culture
Despite the benefits of making risk management a part of your culture, it’s not always easy to do. However, with the right planning and actions from leaders, it can become a natural part of your workflow.
Start by making sure that all stakeholders appreciate the importance of risk management. All parties need to understand that it’s not a stand-alone process, but rather is a key business and strategic issue that impacts all stages of your project. This should lead to a key first step: having a shared set of beliefs and values about how risks should be considered throughout a project.
With this mindset in place, the next step is creating risk awareness and management processes. These will be the key to ensuring that risk management is considered throughout every phase of the project. When crafting these, keep in mind that they shouldn’t be separate from other processes but instead integrated into the overall workflow. These systems should include guidance about how risks are evaluated, mitigation strategies, how concerns about specific risks are shared, and the process for quickly responding to issues that arise.
A final key step, but one that you don’t want to skip, is being intentional about celebrating team members that are exemplifying good risk management practices. You want all team members to be aware of, looking for, and quick to point out any potential issues. Working to create a culture where risk management is prioritized and celebrated is a good way to build these practices with all team members.
Make Plans for Your Next Project
Our team has successfully integrated risk management into all aspects of our delivery culture. It helps us consistently provide clients with great results and serves as an effective way for our team to always improve upon our systems and processes.
Before taking on your next project, we encourage you to spend some time thinking about your risk management processes. If you haven’t already, build the systems and processes you need to make them a part of your workflow and culture. You’ll be surprised how much more effective, efficient, and successful your team and organization will be as a result of this shift.