What is the Connection Between Risk Management & Project Failure?

What is the Connection Between Risk Management & Project Failure?
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In working with project management, many project managers and teams will eventually come to the point where employing risk management is a very important aspect to further the project. Many things can come about when the team does not explore all aspects on what could possibly happen on a project - that is to say, knowing any and everything that could possibly go wrong with the project itself.

But how does risk management prevent the failure of a project? Is risk management really all that important a consideration for making sure a project succeeds?

Risk Management & Project Failure

Before we get into the connection between risk management and project failure, let’s look at what these two things are. Within project management, risk management is essentially the steps taken to make sure that your project doesn’t fail. This means coming up with scenarios and ideas that could potentially cause the project, any project, to fail.

Project failure is when the given project fails in a variety of ways. For example, not setting up enough to get the project finished or not having realistic expectations are just of the ways that a project can fail, usually costing the company more money than was originally estimated or worst, the lost of jobs for those that may have been working on the project.

The very purpose of project risk management is to examine these factors and there set up goals and objectives to ensure that when or if an issue arises, these are met by solutions and not more problems. But how does risk management do this? Within the main point of risk management is something known as risk assessment. Risk assessment is the process of identifying risks and what can be done to prevent or stop them. Within this, there are six steps to go through -

  1. Identify
  2. Assess
  3. Analyze
  4. Make Decisions
  5. Implement
  6. Review

Using these steps help a project manager or a project team avoid project failure. How? As the steps indicate, the process is such to identify all the potential issues a project may come against, assess the risk, discover the ways to prevent the risks, decide which prevention technique will work the best, implement that solution, and then review it.

So how does risk management help to prevent project failure? For example, say a project manger gets a new project and has a team assigned for it. The group is under pressure for this project on top of their other work; suddenly the lines of communication start to disappear until on the cusp of the due date, the project manager sudden learns that tasks that were assigned were either not done or not done correctly.

Risk management would help by having set times for the group to meet, like daily or weekly meetings so that they can discuss the project. Also, making sure that each person knows what their assigned task is and if any issues come about, they know they can speak to the project manager in something happens. Constant communication will help the group keep on task, as well as making sure that the project goes along smoothly.

Risk management allows for a more detailed lists of procedures, if you will, to follow for an assigned project. If the above steps are followed, any issues that can be thought up can easily be taken care by use of planning out what can or oculd go wrong.

Sometimes, it’s a good idea to look at real-world strategies or even real-world horror stories to understand the issues that could come up during a project. In most cases, the failure of not utilizing the tools offered by risk management lead to the failure of the project. It is very important to have plans for risk management in order to avoid project failure.