When we talk about project management, we also talk about risk management. It is an integral part of the project, which can’t be taken lightly. Failure to identify, analyze, and respond to positive and negative risk factors would expose the project being delayed, underperformed, and unsuccessful. Multiple failed projects would reduce the trust factor and devalue the overall business, which is the ultimate risk factor.
For this, creating a risk response team comprising qualified and experienced members would be extremely valuable. They should be able to professionally use historical data, public records, and other internal and external sources for the purpose of planning, monitoring, and controlling the project processes involving risks. They should also be prepared to perform well in emergencies with contingency plans.
With this background, let me reiterate the importance of recognizing both positive and negative risk factors and the fact that both can carry equal consequences.
While some risks are “positive,” they are still unfavorable, because too much of a good thing is still negative. A good team should be able to recognize positive risks as well. For instance, an “under budget” project, where it saves money, is often considered a positive risk. However, the fact is the project manager actually overestimated the project. Thus, don’t be fooled by the term “positive.”
Here are several other scenarios where a good risk response team would be valuable to a project and ensuring of high-quality deliverables.
On the Project’s Deliverable Final Quality
Let’s say we have a deliverable that comes with an expiry. If it delivered too soon, it would become a positive risk, and if it delivered too late, it will become a negative risk. This kind of situation often occurs in construction projects. Either way, the quality of the output becomes questionable.
A good risk response team should have sufficient knowledge and information to make a valid prediction of the outcome. In the construction projects, the final quality would determine the occurrence of future projects or orders.
On the Project’s Aggressiveness
In a project involving aggressive performance, if the execution is too large, it would become a positive risk, and if it is too small, it will become a negative risk. This kind of situation often occurs in investment projects.
An ideal risk response team should have to be able to anticipate and influence the level of aggressiveness proactively. This way, in the case of investment projects, funds would be expended appropriately.
On the Project’s Sustainability
In a project involving sustainable execution, if the deliverable attracts too much attention, it would become a positive risk, and if it is too little, it will become a negative one. This kind of situation often occurs in events involving a large number of event attendance.
The risk response team should be able to provide contingency planning in emergencies and provide alternatives when attendance is not as expected. In events planning, such a situation would affect the final expenses considerably.
In conclusion, a risk response team is the project’s lifesaver. It is an emergency team whose primary job is ensuring the stakeholders are well taken care of, and the sponsor does not risk their investments. Carefully choosing the team members comprising qualified and experienced individuals would make a huge difference in the outcome.