Project risk is defined as “an uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives”.
Knowing how to deal with project risks depends on the specific project risk you are encountering. Project managers usually prepare themselves by putting in place a specific strategy for project risk management. But in order for this strategy to be effective, you need to understand the nature of the common project risks and reflect on what would be the appropriate approach to deal with them effectively.
You have to learn the specifics of the common project risks examples and understand how can they affect your project. Ultimately, you will know which the solution is.
We will discuss the 7 common project risks and what to do about them.
Poor project leadership
Good leadership is a factor that can substantially influence the success of the whole project process. In fact, poor leadership is one of the most typical problems that can arise on projects and one that you might not be aware of during project initiation. Too often, project sponsors are really excited at the start of a project and give you every indication that they will work hard and support you and the rest of the team. The reality can be different.
Once the glamorous bit of getting a project approved is done, the hard work begins and they might not be so interested in all of that. Especially when it involves turning up to regular Project Board meetings, making decisions, and being the active advocate for the project. They won’t act like this because suddenly they don’t want the project to succeed. It is more likely to happen because they didn’t realize it would be so much work and because they are happy to delegate everything to you. Unfortunately, that still gives you a leadership problem at the top
The only way to prepare for and mitigate this risk is to establish a dedicated project management leadership team. Explain the commitment that is required and ensure they are adequately supported as well. Look out for the first signs that their commitment is waning and talk to them about it. An honest conversation might be able to stop the problem before it really takes hold.
Project team problems
Unfortunately, many project issues can be connected to the project team. There could be wide-ranging reasons that can impact a project from a team perspective. Employees can decide to leave their job or the employer can let them go – these are two situations in which the project would suffer because of losing expertise. Turnover – or even negative people on the team who have no plans to leave – can create issues with morale.
This is one risk that you and your project team leader should definitely plan for – someone on your team is going to feel disgruntled at some point as conflicts happen, and it’s best to be prepared to take care of it.
Make sure that you are managing the team consistently with fair benefits and terms for everyone. If you have essential people on the team, consider talking to their line managers to try to secure their commitment at least until the end of the project, maybe through rewarding each member of the team for the good work they’ve done or given them a bonus or similar.
Another example of common project risks that revolve around the project team is that you may as well find yourself working in a location where the local labor market simply doesn’t meet your project needs and doesn’t have the skills to successfully complete the project. In this case, you may have to factor in training for local staff or the cost of bringing in experts from overseas to work with the local team.
Project team leader leaves during project execution
A change in the project team is not the only issue that could arise in project management. Oftentimes, the head of the team – the project team leader may decide to step down from its duty. So, how to handle a key team member leaving during the project execution? Even though project team leaders are people with specialized skills that are crucial for the success of the project, you can recuperate your project from such loss.
You should thoroughly review your team leader role and responsibilities and think about how you can compensate. In the end, if this person possessed the expertise and skill set that none of the other team members possesses, you can always hire a consultant and avoid putting additional risks to the project.
No continuity in the project
The risk that something will change is barely a risk – you know when you start a project that there will be changes. But lack of continuity can be an issue in some projects. Take, for example, the situation where you are changing buildings. This relocation effort may have absolutely nothing to do with your project and could be a completely separate activity. But, still, it will certainly have an impact on your project team.
No matter how adaptable, people can be affected by office relocation, because it impacts their comfort zone. In such cases, you may struggle to create a sense of team cohesion in the new location. You should plan a strategy for this potential situation and think about tactics that will keep the continuity of your team so that you don’t have a large impact on the project.
Inaccurate time and budget estimates
Eliminating risk when making time and cost estimates for a certain project is impossible. But what is possible is mitigating the impact that inaccurate estimates may have. Firstly, what you need to do is give your best to establish a strategy that will help you determine the project budget and time for delivery as accurately as possible.
In this process, it is important to clearly define project scope and start and finish of every task and subtask. In addition, you need to keep track of your expected and actual time and see if you notice any inconsistencies, you can intervene right away and avoid further damaging your project.
Lack of project resources
The lack of resources can hit any project at any time. This could be anything from materials and employees down to the meeting room being booked at the time you want it. How to prevent this issue which is one of the typical project risks? At the beginning of your project, firstly, you need to think about the resources that you need on your project, including people, equipment, and materials, and about what you would do if they suddenly became unavailable. Planning your strategy for dealing with a lack of resources up front is crucial for the success of your project. It could involve sourcing alternative suppliers or cross-training your team so they can cover for each other. You might also need extra time to complete the project due to delays in getting the right kit, or you might be able to compromise on quality.
Change of business strategy
Change of business strategy is yet another example of a project risk that could have a substantial impact on any project, regardless of the type or scale. Aligning business strategy with project management increases the chances for the project to be delivered successfully. Therefore, if one project’s objectives were adjusted to a business strategy that was unexpectedly changed, there is the probability that the project will suffer. a change of business strategy could happen because the management team has decided not to launch a new product, to launch a new product, to open an overseas facility, to close an office, to float on the stock market, or pretty much anything else.
The thing is, most project managers don’t get involved with setting business strategies so they can only react to project changes when they happen. The best mitigating action in these circumstances is to carry out a thorough review of what the change of business strategy means for the project. It might have no impact but at the other extreme, it might require closing down the project prematurely. You should think about what you would need to know in order to make the right decision and then if this happens to you it will be straightforward to carry out that analysis.
In a nutshell
These are just some of the risks that are possible to impact any project. The best thing to do for your project is to develop and carry out proper risk identification and risk management plan. Spend some time brainstorming the risks that might affect your project and document them. Then you’ll be able to refer back to your original notes and transfer the important points to your risk log.