Copyright © 2008 Ed Bones
In every human endeavour there is an element of risk; personal, project or financial, or a combination of them all. The task of the responsible individual is to identify the risk and act accordingly. We all do these 'risky' things, almost daily, aware that we are taking a risk. Rather than avoiding risk we become adept at identifying it and having a strategy for dealing with it if the risk materialises. This is what risk management is about, and is a skill that is important in virtually every endeavour.
The popular misconception that risk management is difficult or complicated stems from the bureaucratic methodology of some system-oriented organisations and managers. It is neither complicated or bureaucratic, and need not be. Risk management is basically a simple proposition with a complexity dictated by the nature of the situation to which it applies - usually a project, and the parties involved. In its basic form risk management involves:
1. Identifying risk - Looking for anything that threatens the successful completion of the project against the original requirement. Risks can be environmental, organisational, technical, legal, economic or commercial.
2. Counteracting risk - Taking action to remove or reduce the probability of a risk being realised. The response depends on the nature or seriousness of the risk.
3. Acting when the risk event occurs - Invoking whatever contingency measures were devised for the risk that has materialised.
And for this to happen requires:
4. Monitoring at all stages - This typically means documenting a risk assessment in a profile that identifies the risk, the probability of its occurrence, and the impact if it does materialise. Factors that score highest are those that require the greatest attention and monitoring. A good risk manager will devise contingency plans that reduce either the probability or the impact of these occurrences, and so remove them from the scene.
Working within a formal structured management system similar to that defined by ISO9001 requires the application of risk assessment practices to satisfy the requirements of the Standard. Auditors of such systems may not find specific references to risk management in these areas even though the identification of potential failure (8.5.3) is wholly concerned with a topic that is nothing less than risk management.
Well managed risk taking is a necessary feature of any forward thinking enterprise, since risk is an element of any progression or improvement. It is the adoption of effective risk management in conjunction with the continuing need to drive forward from a comfortable position that leads to progress and advancement. Doing what we always do purely because the risks appear to be negligible or are well known is to be 'risk averse', and for progressive organisations cannot be acceptable. Neither is it acceptable to pursue new ideas without an understanding of their potential benefit, proper planning, a clear idea of the threats to these benefits being achieved , and a strategy for dealing with them should they materialise. We need to manage in a manner that is neither predictable or reckless. Risk assessment is an essential tool to support this strategy. We ignore it at our peril...
Meon Consulting, founded by Ed Bones, was formed to assist clients with managing their businesses in a manner compliant with ISO9001/14001. Ed had earlier held a number of senior posts with Hi-Tech companies in the UK, Europe and the USA. He has written and lectured on full range of topics on quality improvement and TQM. http://www.rent-an-auditor.co.uk . To obtain your FREE Presentation please visit http://www.rent-an-auditor.co.uk/contactus.html
Project Management Articles
Ways to Reward Employees and the Project Team
As a Project Manager do you give much thought as to ways to reward employees - although more likely as a Project manager it would be ways to reward your Project Team. Depending on your organisational structure it may not be within the power of the Project Manager to give pay rises, so here are some suggestions as to different forms of renumeration
One of my favorite ways to reward high performing employees is with public recognition. Whether you run a pizza joint or a Fortune 500 company, never underestimate the significance of public recognition. By praising an employee in front of his peers, you indicate what types of behavior are most valued and give your employee increased esteem to recognize his good work. This is no small motivating factor, and can inspire hard workers to work even harder.
Of course, bonuses are a great way to reward employees. These awards don't have to only come in the form of money, however. Some of the most popular ways to reward employees in lower paid industries are with tickets to various events, but these methods can also be transferred to higher-level positions. Why not give your top...
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Managing Project Risks (Part 1): Don't Be Snared by These 6 Common Traps
When your enterprise decides to undertake a new endeavor -- whether it's designing a new training program, planning a new service, or revamping an existing product -- this endeavor is called a project. It involves people, funding, resources, schedules, requirements, testing, fine tuning, and deployment, plus a host of other activities.
You may have seen this phenomenon by now: projects are risk magnets. Why is that?
There appear to be several factors involved. Managing project risk is a process that seems to be poorly understood by business owners and project managers. As a result, projects frequently experience problems with understaffing, schedule overruns, cost overruns, and unmet requirements. This article (the first of a series) explains six common traps that, when not fully recognized, can lead to unpleasant surprises.
Here's what I've observed over many years as both a project leader and participant:
1. Each project differs in some way, shape, or form from the last one.
If all your projects were exactly the same, you could simply use a cookie-cutter approach to crank 'em out without losing any sleep at night. Although projects may share some similarities, a new project could very easily...
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