Living in an uncertain world makes proper Risk Management critical for survival. In our age of frequent natural and man-made disasters, volatile markets and economic meltdowns, recognizing and targeting of possible risks is of Manager’s highest priorities.
However, Risk management is quite a complicated affair, especially on organizational level, and it utilizes several important tools that are crucial to master if you want to do it right. Today I would like to address Risk Awareness, without which Risk management becomes a nightmare for any Project Manager.
Risk Awareness is a standalone topic inside Risk Management. It deals with a very simple, but nevertheless critical question: who watches the environment for possible risks? Even with the most advanced systems and processes in place to track risks, not having people on board who’re identifying risks properly, the risk management system becomes a burden, a waste of resources, with real risks being managed in personal excel files, detached from the situation at hand.
With the help of Risk Awareness, the Project Manager relies heavily on all stakeholders to be his eyes and ears in the field; while he’s managing the risks – everybody else is charged with the task of their detection and communication.
However, as human beings we carry many biases that prevent us from performing this task ideally. There are several common misconceptions in our attitudes toward risks:
- thinking that someone else will know better leads to decreased responsibility
- thinking that “it is not in my role description”
- thinking that “it is the Manager’s role to manage risks”
- lack of ability to apprehend the real likelihood of events
- not accounting for differences in personal risk tolerance levels
There are also organizational barriers such as hierarchy, political games and broken communication.
We cannot mend communication channels, change hierarchy or established culture in one day, but what can be done is engraving a different approach to Risk Management in your team, on your project. Making everyone on the project team a risk detection agent on a constant look up for any possible risks will directly impact how effective is your Risk management. This is not unlike we teach our children to be on guard for possible hazards, and in the case of one to come home and always tell the parents, otherwise we won’t be able to react accordingly and in a timely manner. Raising the Risk Awareness of the Team is one of the most critical engagement rules every manager should instill in his or her staff.
Here are several pointers that will help you to do it right:
- Walk with the team through the whole Risk Management process from risks identification to their possible resolutions to make sure everyone knows IT IS THEIR RESPONSIBILITY to look out for possible mishaps
- Always provide a positive reinforcement if a risk has been raised
- Socialize/broadcast to everyone when issue was averted due to a timely raised risk.
With your team members unremittingly aware of possible risks all that is left for you is to manage the raised risks effectively. Aside from bringing resolution to rising issues, the essence of Risk management is aligning the risks tolerance of the stakeholders, bringing everyone to the common ground through clear translation of the risks into a common language. In the next post on Risk Management I’ll outline a model that can be applied to a majority of projects to make risk management manageable 🙂