Risk Analysis and Management a Vital Key to Effective Project Management

Everyone Always Loves To Talk About Risk Management

Just kidding. For many, it is a dreaded topic, but risk analysis and management is a vital key to effective project management. In today’s global economy, risk factors are many and varied- Covid certainly has shown us that – but no matter what form they come in, understanding how best to identify them and manage them can be a major factor in determining whether a company succeeds or fails.

Quantitative vs. Qualitative Risks

When it comes to assessing risk, most organizations put all the emphasis on quantitative aspects. Numbers are easy to understand and comprehend, right? Topics like scheduling and budget seem important and official (and they are), but if that’s all you’re assessing during your planning sessions, you’re missing the mark, big time.

Here’s the thing about numbers and probability assessment when it comes to risk management: humans are notoriously terrible at assessing probability. So, if you’re putting all your eggs in the probability basket, you and your team are likely going to be very frustrated throughout most of your projects.

One thing that often gets overlooked when assessing project risks is the human or qualitative element. Remember, all these projects are being done by humans…

What Exactly Is Qualitative Risk?

People skip over the qualitative risk factors because they’re so difficult to assess. What are the possible hidden mental wellbeing risks to your team members and personnel on any given project? You can’t measure them like you can with time and money. Not only that, people often want to hide them. However, if you don’t address them early on, you run the major risk of team burnout and high turnover.

This leads to a decrease in team function, deviation from your project goals, and an increased likelihood of missed deadlines or worse, poor project implementation. Aren’t those the exact things you’re trying to avoid by having risk management strategies?

If you’re not careful, risk management and assessment become a rote exercise of checking boxes.

This leads to one of the worst things you can have in a company: team members who are present physically but completely checked out mentally and emotionally. This is almost worse than high turnover. At least if you when people choose to leave your organization, you have an opportunity to hire fresh, enthusiastic, albeit untrained, new personnel.

People who stay with a job and merely going through motions can create a negative sub-culture. One that has rapidly spread and taken down entire corporations. That’s why it’s imperative to include qualitative risk management in any project assessment.

You, as a leader, need to keep a sharp eye on your team. Looking for signs of stress or burnout and heading them off at the pass before they become major roadblocks to project completion is, arguably, one of your most important tasks.

So how do we avoid this?

Steps To Manage Qualitative Risks

There are certain key steps you can take in order to begin assessing qualitative risks in your organization:

Step 1: Risk Identification

When sitting down with your team, ask them what the foreseen risks are with your project. But, don’t just have them list risks; press them to elaborate. For example, if someone says there’s a risk of a delay in the project (duh, there’s always a risk of delay), ask them to expand on how things might be delayed. What might happen if different parts of the project are delayed? What would happen if the delays built on each other? Allow them time and space to imagine how things could interact. 

Step 2: Identify the Vital Few

Distill your choices down to what you really view as being the critical risks to your project’s completion. What are the things that were they to happen, would really cause this project to crash and burn versus the things that we can manage relatively quickly and easily and still keep the project on track?

To be clear, we aren’t talking about your risk priority numbers (RPN) here. Many people are going to want to focus on that because it’s all they really know, but try to steer them in the direction of awareness of possibilities of risks, not so much probabilities. In fact, you might want to have a separate meeting altogether to address that part of the project. 

Step 3: Decide The Path You Want to Take

This is the aspect that can really paralyze organizations that aren’t fully aware of and understand the choices available to them. You need to know what the possible negative outcomes are for every choice you make. And, you have to all be willing to accept those outcomes as a team.

Step 4: Outcome Reflection

This is key to “Lessons Learned,” which we discussed in our previous blog post – and the part of the risk process that is most often forgotten. As you reflect on what you saw in your project vs. what you thought you’d encounter in the initial risk identification, the key question is: Did anything catch you by surprise? Whether the outcome was good or not is completely irrelevant if the outcome came as a shock to you and your team. You can’t replicate outcomes that came as a surprise, so even good surprise outcomes are bad. Make sense?

Forget about your RPN

Note that NOWHERE in this process have we talked about calculating your RPN…no, we didn’t overlook it. This is completely intentional. In case you haven’t figured it out, we are really big fans of separating quantitative and qualitative risk assessments, and the qualitative assessments need more attention.

Decrease Your Project Risk By Putting People First

It’s a crazy concept, but adding in time during the planning process to make a project staffing plan one of your top priorities can be a game-changer that tells your team and higher-ups that it’s just as important to have the right people on the projects as it is to meet your deadlines. This goes beyond asking “Who has time?” and moves towards “What do we want to make time for?” by taking things off the plate of those who are the best fit for the project. It sets a tone that you’re the type of leader who wants to prevent burnout before it even happens by intentionally deprioritizing activities, not just asking folks to “do more.”

This creates a true sense of camaraderie and teamwork that helps employees to thrive. If they feel valued and know that it’s just as important to you that they’re well taken care of as it is to them, it greatly increases your chances of successfully completing a project on time and on budget.

Get A Fresh Take On Risk Management And Analysis

If you have projects that are struggling or teams that are nearing burnout, you have plenty of options to turn those projects around.

Book a consultation with us so that you can learn how to mesh the quantitative portions of project management with the qualitative parts. You’ll get a fresh perspective on how to run your project from a people-centric standpoint. We know it will yield great results in terms of timeliness, employee satisfaction, reduced stress levels, and fewer project headaches.

We all know project management can be stressful, so why keep spinning your wheels? Don’t start another job before calling us to see what we have to offer.

Ready to Get Started?

Schedule a complimentary 30-minute consultation call with our team.