Managing Project Risks

In this chapter

• Understand why managing risks is what project management is all about
• Learn the key principles of controlling project risks
• Learn the value of managing project risks in a systematic manner
• Learn the essential steps and tools for effective risk management
• Realize that there is a common set of project characteristics that are responsible for most project risks
• Understand why many project risks are actually self-inflicted during the project planning process

Managing project risks is the ultimate in proactive project management. It is the project manager's radar system. The goal of project management is to achieve the project's critical success factors, including meeting the targeted business objectives and client expectations. The goal of managing project risks is to identify and prepare for any potential threat to the project's critical success factors before it actually occurs. As a result, risk management is the essence of managing projects. Nothing impacts the decisions we make regarding general project approach, level of planning rigor, staffing, project control procedures, and overall contingencies more than the risks facing the project. Yet, there may be no aspect of project management that has a wider array of "real-world" implementations.

As a result, there is often a sense of confusion and uncertainty regarding the proper project risk management approach to take. In this chapter, we will clarify all of this. We will review the core principles, key process steps, and best practices that are essential to managing project risks. We will share insights on how to identify common project risks, review the proven strategies that work best in controlling project risks, and highlight the typical risk management problems, so you can avoid them.

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