It is no exaggeration to say that the most important task in project management is risk management. manage and avoid risks to help your project succeed efficiently. however, few project managers will be able to manage risk properly.
so this time, i will introduce the basics and methods of risk management.
what is "risk"?
in many cases, the definition of risk is not clear when implementing risk management. project managers are unexpectedly in the minority who somehow understand what constitutes risk and what is different.
So what are risks? According to Project Management Body of Knowledge (PMBOK),which organizes project management know-how and methodologies, risk is defined as "uncertain events affecting at least one project goal" or "uncertainty that could have a positive impact on the project."
in other words, events that negatively affect the project and events that have a positive impact are generally called risks. isn't risk management managing the uncertainty that "adversely affects" a project? there will be many people who thought.
yes, traditional risk management was thought to be used to avoid future problems, but recently attention has been focused on managing uncertainties that positively affect projects as risks.
the reason for this is to "eliminate project problems as much as possible or reduce the negative impact of them, while actively incorporating positive effects."
Can you say that a project will succeed simply by eliminating the negative factors that can occur in the project? The answer is No. Avoiding these risks is not a result to achieve unless you have a positive factor on your side that will be a tailwind for your project.
eliminating the risk of negative factors only makes it a project that is neither possible nor impossible. in order for a project to be "successful", it is necessary to manage the risks of positive factors such as new technologies and promote the project.
basics of risk management
from here, i would like to move on to concrete methods. the basis of risk management is "grasp" and "countermeasures". understand what risks might occur in your project and avoid them by taking countermeasures. one thing to note here is not to think that risk is a cause of failure. risks that were thought to be negative factors may have a positive impact. let me explain concretely using the japan national football team as an example.
≪ project goals ≫ to qualify for the world cup after qualifying for asia≫
risk (1) (quantitative) ace striker gets hurt
negative impact: lost qualifying due to lack of finishing ability
positive impact: young players who participated as substitutes showed their heads and played a great role
risk (2) (qualitative) the team is overly nervous and unable to put out its original power
negative impact: mistakes come out one after the other and lose the game
positive impact: by having a sense of tension, you can enter the game without hitting your strength
these two events have not occurred at this time, and at first glance they seem to be a risk of negative impact. however, there is also a positive impact on the occurrence of this risk, and if the risk materializes by any chance if it can be attached to an ally, there is a possibility that the negative impact will be minimized but also turned to a positive impact.
in other words, it is important to understand not only the risks that can occur, but also the negative and positive impacts that can occur. in addition, if we take measures that will have a significant positive impact, the project will not be affected even if risks materialize.
in the above example, since the project manager is the coach of the japan national team, it is appropriate to take the following measures.
- avoid excessive use of ace strikers in training and fortification matches
- get enough rest in a game you can afford
- order to avoid dangerous behavior
- actively develop young players in preparation for the occurrence of risks
- incorporate mental training to maintain moderate tension
- relieve tension by training assuming a match location
if these measures are in place, we can incorporate a lot of positive factors in the unlikely event that a risk materializes, and lead the project to success.
with the viewpoints of "individual risk" and "overall risk"
usually, risks in a project are assumed to be negative factors such as "mid-specification change" and "defective product successively". the risk of "ace striker getting injured" and "the team is too nervous to put out its original strength" introduced in the previous example will also occur and if the negative impact is strong, the goal of the project, the asian qualifiers, will not be achieved. however, managing these risks does not mean that the project's goal of "qualifying for asia and competing in the world cup finals" itself is managed.
the important thing here is to have the perspectives of "individual risk" and "overall risk" in risk management. if the risks introduced in the previous example are individual risks, the overall risk is that it is difficult to pass the asian qualifiers. tom demarco, an authority on project management, also said that project risk "has overall and partial risks."
It is simply a very narrow gate for the japan national team to pass the Asian qualifiers and participate in the world cup finals. there are 46 countries that have competed in the 2018 fifa world cup and asia qualifiers, so simply, 5/46 can compete in the world cup finals. in other words, there is a 10.9% chance of competing in the world cup finals, and 89.1% is unlikely to be eliminated.
however, in reality, the elements of being able to participate in the world cup finals are not simple, so it is important to manage various factors and produce accurate figures. in addition, it is also essential for risk management to consider whether to execute or stop the project. as mentioned earlier, risk also has positive factors.
in addition, it is important to identify various risks for individual risks, and to prioritize and take measures after understanding all them. since it is difficult to deal with all the risks that can be predicted, it is essential to prioritize and take measures that take into account the probability of the risk occurring and the degree of impact on the project.
Summary
This kind of risk management is nothing that only project managers should have. all project members gain a better understanding of risk management, show interest, and develop skills to manage organizational risk. that way, the project will surely drive for the better. first of all, let the project leader clearly understand risk management, acquire sufficient skills, and become a model for project members.
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