7 Most Common Project Management Risks and The Most Effective Control Mechanisms to Keep Your Project on Track

In having the responsibility to deliver hundreds of projects over the years, I’ve found that none are without risk. All are unique with various challenges and inputs from client senior management, other influential stakeholders, technical and business unit team members, vendors and governing bodies.  Given that the potential impacts (positive and negative) are also unique, the approach to risk in projects must include steps for planning, preparation, prioritization and analysis in a controlled and deliberate manner. In other words, we must identify risk and manage it before potential risks become issues.  In this article, we will explore, not all, but common risks at a high level, assuming that they are either individual risks with potential impact to a critical project objective, or overall risks that could impact the project as a whole. Let’s start by identifying the 7 most common risks and their possible impact to your project or program.  

  • Financial Risk – events that could impact the budget (the amount of money needed to complete the project).
  • Scheduling Risk – unplanned scheduling events that could cause the project to be delayed, delivered early or cancelled.
  • Scope changes – unplanned changes to project scope (in excess or uncontrolled, known as scope creep) and what will be delivered.
  • Strategic Risks – unplanned changes in technical direction or business strategy that could have an impact on deliverable specifications.
  • Operational Risks – risk related to business or technical implementation processes such as procurement, distribution, procedures, new processes, change management, testing or installation.
  • Market or industry Risks – unplanned events such as shortages in product or vendor resources.
  • Communication Risks – lack of a clear communication plan that keeps all project participants engaged in the appropriate project activities, informed with the appropriate content at the appropriate times.

So how do you plan for potential events that may or may not occur but could have a significant impact on project delivery?  The project manager must use a risk management process to identify, evaluate and mitigate or prevent risks that have the potential to impact desired outcomes.  This is best accomplished by developing a risk management plan.

                 

A risk management plan describes how risk management activities will be structured and performed. Several project documents (including the project charter & plan) and tools & techniques (such as meetings to gather data about what could go wrong, various plans and registers within the project document repository, and data analysis) serve as inputs to risk plan development. The risk management plan should also document potential risks, the probability and type of potential impact to the project, the responses or proposed solutions to the risks and the resources assigned to resolution.   

Other tasks to remember:

  • Make sure that you understand the entire project life cycle. Use sound project management practices and tools for the overall project.
  • Take a proactive approach to risk management. Start planning early.  Be transparent.  Include all project team members in the process.  Do not wait for a potential risk to become an issue.
  • Keep your risk register current with a complete list of potential risks, actions and assigned resources.
  • Monitor the plan often and treat risk management as an ongoing process.

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