Project risk management can be one of the most challenging knowledge areas within the PMBOK to implement successfully.
As I’d written in my most recent ProjectTimes.com article, there are many ways in which an organization or a project team can fail to receive all the benefits which can be realized through effective risk management. Even when risks are being appropriately identified and analyzed, effective risk response development and implementation is a frequent point of failure.
When we consider different project management knowledge areas, it’s important to realize that there are multiple interdependencies between them and this is especially true with risk management. If your team does not sufficiently define and decompose scope, it cripples their ability to thoroughly identify risks using a bottom-up approach.
One critical dependency which can easily be overlooked is between stakeholder engagement and the communication & response implementation of risks.
We don’t identify, analyze & communicate risks just because they matter to us. We need them to matter to our key stakeholders and especially to those who we’ve identified as risk response owners. If these risks don’t matter to those individuals, how likely is it that they will pay attention and own the development and committed, timely execution of responses?
Let’s assume you haven’t identified all key stakeholders nor engaged them by providing an overview of the project and taking the time to gauge their level of interest and influence. When risk identification has been completed, through the subsequent analysis you realize that the right response owner for one of the critical risks happens to be a stakeholder who you haven’t met.
If your very first interaction with that stakeholder is to ask for their support in responding to some risks on a project they’ve no familiarity with, how successful do you think you will be at getting their buy-in? Without having a good understanding of what’s important to them or what their desired communication style is, even if they are aware of you project, the risks and how they are being communicated might not generate the true sense of urgency which you are looking for.
This is not to say that you must wait until all stakeholders have been identified, engaged and analyzed before commencing risk management activities. Like most project management practices, risk management is iterative – it’s perfectly fine to do a high-level risk assessment with your core team in the early days of a project before you’ve met with all key stakeholders. But ensure that stakeholder engagement ranks high on the list of prerequisites for conducting a detailed risk identification and analysis session – ignore this and you can safely add stakeholders as a key source of risk to your project!