10 Common Risk Mistakes to Avoid - Part 2 - Converging 360
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10 Common Risk Mistakes to Avoid on Projects – Part Two

Identify and Analyze Risk

 

10 Common Risk Mistakes to Avoid on Projects (continued).

This is the second part of our guide to 10 of the most common risk mistakes that you should try your best to avoid on projects.

Before moving forward, be sure to read the first 5 Common Risk Mistakes. Then, when you’re ready, check out the remaining five mistakes that can hinder your ability to tackle a project successfully, along with tips that will help you manage risk more effectively.

Mistake #6 — Not Adequately Defining Risks

A well-defined risk is specific to the project, and it identifies the root cause of the risk.

As an example, “poor communication” is not a risk. We need more information to act on the risk.

A more well-defined risk would be: “Poor communication of the client’s needs regarding the new server installation will cause two weeks of rework.”

Tricks of the Trade®

  • Look for the root cause (the underlying source of risk) to make sure you fully define the risk.
  • Instruct those who are identifying risks to use the cause-risk-effect format for opportunities and threats.

Mistake #7 — Using Only One Risk Identification Method

It’s really simple: using a combination of methods ensures more risks are identified.

Tricks of the Trade®

Risk identification methods include:

  • Prompt lists
  • Brainstorming
  • Expert interviews
  • Sticky notes
  • Affinity diagrams
  • Nominal group technique
  • Cause-and-effect diagrams
  • SWOT analysis

Mistake #8 — Not Spending Enough Time Determining How to Handle Risks

Spend the time necessary to determine what can be done to respond to individual risks and to reduce the overall risk of the project.

Tricks of the Trade®

  • Look for ways to eliminate threats and exploit opportunities.
  • Determine contingency plans, as well as fallback plans (what to do if the contingency plan doesn’t work).
  • Establish contingency reserves for cost and schedule.
  • Response plans should be in place before any risk occurs.

Mistake #9 — Forgetting That Risk Management Is an Iterative Process

Risk management isn’t something that you do only once at the start of a project. Instead, it should take place throughout the life of the project.

Tricks of the Trade®

  • Include risk as the #1 topic at team meetings.
  • Conduct risk reviews throughout the project to identify new risks and update risk response plans.
  • Track non-top risks on a “watch list” for later review.
  • Make changes to the project plan when new risks responses are developed.
  • Use risk audits to analyze past risk management efforts, and to take corrective action as necessary.

Mistake #10 — Not Showing the Value of Risk Management

Always communicate the cost and schedule savings you can achieve from your risk management activities to management and other stakeholders.

Tricks of the Trade®

Use qualitative and quantitative risk analysis to prove the value of risk management by showing how it can decrease overall project risk and reduce project cost and duration.

For example, you might say:

  • “This project originally had a risk score of 8.6, but after our risk response planning work, the risk score is only 6.1.”
  • “We originally estimated the project would take 16 weeks and cost $500,000. Because of our risk management efforts, we were able to reduce that to 13 weeks, with a total cost of $434,000.”

Managing Risks: A Key Component to Successful Project Management!

Managing risk might be the answer if you’ve been struggling to complete projects according to plan, but avoiding the mistakes others have made is also key to overall project success. So, in addition to learning how to identify and reduce risks, you also have to be clear on the common errors that you need to avoid in order to do a stellar job.

Want to dive deeper into Risk Management Tricks of the Trade®? You can take our courses live in person or online in a virtual classroom. And you can even check out our eLearning courses and self-study materials if that’s what you’d prefer. Our NEW Risk Management Book is a helpful resource, and different than anything else available and essential reading for anyone looking for a clear explanation of risk management and how it fits into the project management process.

1 Comment

  1. Pingback: 10 Common Risk Mistakes to Avoid on Projects - Part One - Converging 360

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