Effective Risk Management & its impact on projects
The success of a contemporary organization is due to its ability to manage projects felicitously and meet customer expectation. The project has become a means to an end rather than an end in itself. Therefore, to determine whether the project is successful or not, its end should be well considered. Moreover, the success of a project can be seen from the project itself or what it was expected to realize depending on the interests of the stakeholder. Besides, to achieve the success of a project, the sustainable fund should be ensured, not only that but also, to be supported by creative managers that can lead teams effectively toward superior project outcomes. But, how to identify the effective manager? such managers are creative, react, and communicate effectively and quickly particularly during the crisis. They, therefore, are prepared to deal with crises and considered potential risks. When a project can be run through an effective risk management check list, determine the in compliance ones and apply mitigation to ensure high rate of success and safe project completion.
Effective Risk Management (ERM) on the other hand, allows the organization to identify internal and external organization risk, as well as determine the opportunity that lies behind the and in addition to the strengths, weaknesses of a project besides the prospective opportunities and threats. It is about planning for unexpected events where management should be ready to respond quickly. Accordingly, a question raised is about, how to ensure the project’s completion success? To answer this question, first of all, organizations should attempt to avoid complications and risks before handling potential risks. Effective Risk Management can provide assurance if the following are addressed and deployed well within a project (Leadership, Planning, Communication, Team work and Evaluation);
Effective leaders can recognize the important role of risk management, this role is reflected in achieving goals that are a vital part of strategic goals. Effectiveness is simply describing to which extent the organization achieves its goals, therefore, ERM reflects how well leaders can handle the potential risks to achieve goals with minimum loss. In fact, the surrounded environment is full of risks (e. g. financial, environmental, social, and cultural), where some can be managed while the organization should adapt to others. Leaders to ensure ERM should be creative, think creatively and act quickly. In addition, the effective leaders have to do the right things rather than doing things right.
Despite being an outcome, the project’s success is a result of a set of plans that have been managed properly. This plan mainly includes the prospective risks, probability of occurrence, potential influence, and suggested actions. Once the organization has brainstormed all the risks that could affect its project. It will indicate that some of the risks can have a higher impact than others. Usually, Low-risk events have scant or no impact on cost, time schedule, and productivity. While the moderate risk causes some increase in cost, disruption of schedule, or decline of productivity. in contrast, high-risk events are most probably to cause a considerable increase in cost and expenses, disruption of the schedule, and/or problems in productivity if not running down.
Another important issue that should be considered is how to ensure effective communication with stakeholders. The effective manager communication vision firstly, then attempt to make the big picture seen by project stakeholders, and teams. This determines people’s expectations who provide funding and are influenced by the outcomes. It ensures that the project moves fluidly and steadily where one step proceeds to the next without distraction. By clarifying, averting, and dealing with expected risks in advance, the organization ensures that its employees can respond effectively when risks appear and or organization intervention is highly requested.
Reinforce Project Managers and Teams:
project managers and their teams should maximize results and meet expectations. This happens by identifying the processes of risk management at the organization level, the organization, in turn, makes success more likely by decreasing and avoiding negative threats and risks so projects can be accomplished within time and budget. This empowers the project managers to meet the project budget and achieve targeted goals.
When top management members don’t pay enough attention to risk management, the projects get exposed to turbulence and become threatened with failure. Therefore, the ERM enables the organization to increase profits and decline expenses, particularly that those activities that have no or limited impact on a return on investment. In spite of difficulties, effective project managers give priorities to ongoing tasks and activities according to performed results. On the other hand, the role of project managers has to be changed. The project manager can deal effectively by taking the risk that has been determined and sets systematic steps to be implemented that will minimize likelihood. Those steps in turn become emergency plans that can be aside. Should a risk event occur, the emergency plan can be carried off rapidly, decreasing the break-off-periods on a project.
Getting internal and external feedback is an essential activity to ensure that the project successfully moving forwards with the intended plan and milestone completions. This can be realized by evaluating the entire project phases from the imitation phase to closing phase. To evaluate a project’s completion success, the organization that positioning itself at the best practice level shall assess the impact of an organization’s activities on mitigating exposure to complications and exploiting opportunities that capitalize on the organization’s strengths.
For example, if the organization develop and deliver a training program that creates awareness about staff commitment to their personal development, including enhancing performance, learning new skills, adopt new healthy working culture, learn new creative working techniques. Then when organization measures the increase number of improved dedicated employee. The organization risk management initiatives have successfully contributed to the organization through the increase of work productivities, minimize waste and enhance performance. Otherwise, the organization should re-look on its training programs.
Duggan, Tara (February 19, 2019) Why Is Risk Management Important to Project Success? Retrieved from: https://smallbusiness.chron.com/risk-management-important-project-success-56920.html
Bakker, K. (2009). Risk management does (not) contribute to project success. Paper presented at PMI® Global Congress 2009—EMEA, Amsterdam, North Holland, The Netherlands. Newtown Square, PA: Project Management Institute.
Stanleigh, Michael (March 3, 2016) Use Risk Management to Improve Your Project’s Success, Project Audit, Project Management, Quality Management, Retrieved from: https://bia.ca/use-risk-management-to-improve-your-projects-success/
Bannerman, P. L. (2008). Defining project success: a multilevel framework. Paper presented at PMI® Research Conference: Defining the Future of Project Management, Warsaw, Poland. Newtown Square, PA: Project Management Institute.
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