Five Tips for Better Risk Management

One of the true tests of leadership is the ability to recognize a problem before it becomes an emergency.   - Arnold Glasow

A few weeks ago, I wrote about learning to take risks. Fear of failure sometimes keeps people from moving outside of their comfort zones and trying something new. But the worst thing you can do is fail, and then identify lessons learned for next time.

  Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Image courtesy of Stuart Miles at FreeDigitalPhotos.net

Now let’s talk about managing project risks. A traditional risk assessment looks at impacts to scope, cost, quality, and schedule, factors that are all very interrelated. As you examine your project and realize things have gone a bit off-track, you may feel like you need to sacrifice one factor to stay aligned to the original plans for the other factors. For example, you may have to accept lower quality standards to remain within budget; or alternatively, you may need to spend more money to meet the quality standards you set.

As a project manager, risk management is one of your main responsibilities, and you need to work with your team to identify and mitigate these risks as quickly and cleanly as possible.

Here are five tips for better risk management:

Build trusting relationships with your team members. You want your team to feel comfortable sharing their concerns with you, so relationship building is key! Let them know early on that you are there to help them – even when things start going downhill – and that they should bring risks to you early so you can help mitigate them.

Ask questions. Sometimes your team members will not tell you the whole story, either on purpose because they do not want to admit that something may be wrong, or perhaps because they do not think a particular detail is relevant. Always ask questions so you fully understand the situation and can assess risks as they arise.

Use a risk management tool. A risk management template will help you track risks and make them visible to your team and project sponsor. Create a simple spreadsheet in Excel that has space to explain the risk, assess its impact, identify mitigating actions to help correct the risk, and assign an owner and due date for resolution. Then revisit this tracker each week (or more frequently, if needed) to make sure progress is made toward risk mitigation.

Instill a “red is good” mentality. If you are using a project dashboard, you will likely have an area that indicates project health (e.g. red/yellow/green dots). Encouraging your team to have a “red is good” mentality means that they will not be afraid to bring a risk to you – to show up as “red” on the dashboard. It is better to surface a risk (and be labeled as “red”) and mitigate it than to hide behind a “green” until it is too late to do anything about it when you finally do speak up. Sponsors do not like to be surprised by “red” items, either, so be fair and honest with your labels, and always question a dashboard that is completely green.

Get your project sponsor involved, as needed.  Part of the sponsor’s job is to help remove barriers. If you have exhausted all other options and need her to step in to make a tough decision or have a tricky conversation, then go for it. Make sure she has the right context, understands the options and their impacts, and is positioned for success.

Active risk management is an important part of your role as a project manager. So keep your eye on the intent and goals originally outlined in the project charter, and create a safe environment for your team members to come to you early and often if they see any risks to success.