Our blog series – “Master Project Management” covers some of the essentials of the art and science of project management. It talks about deﬁning true needs, building a solid team, and performing a ﬁnancial analysis. It addresses how you can ﬁnd the right balance points between extremes like “managing everything vs. managing nothing” and “doing work yourself vs. letting the team do everything.” This series will help develop the foundation you need to become a high performing project manager.
Be Objective About Threats
Every project faces a range of risks, from the very small to the very large. Be aware that responding to risks consumes resources. As a savvy project manager, you have to evaluate the threats facing your project, determine which of them are most important to address, and then decide on a course of action.
There are four basic ways to deal with risk. You can avoid the threat: choose a course of action that eliminates exposure. You can transfer the impact of the risk: as with insurance, you don’t avoid the risk, but instead make yourself relatively immune to the worst consequences. You can assume the risk: simply proceed with the knowledge that you agree to deal with the consequences if the worst happens. You can prevent or mitigate the risk: take action to eliminate the root cause of the risk or at least lessen its impact.
Dealing with risk is mostly a matter of planning:
Identify the greatest risks: What parts of the project do you (and your company) know the least about? Consider everything from scope, timing, and cost to technology, resources, and market factors.
Quantify and analyze the risks: Though it can be difficult to do, try to quantify the nature of the risks. Determine probability and impact for each risk: the likelihood of the undesired event actually happening and the effect that it would have on the project.
Deﬁne a contingency plan: Identify speciﬁc courses of action to be taken if a problem occurs. Determine the best approaches for addressing risks that are most likely to occur and/or that would have a severe impact on the project (and customers).
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“Project Management: 24 Lessons to Help You Master Any Project” by Gary R. Heerkens is a copyrighted work of McGraw-Hill and McGraw-Hill reserves all rights in and to the Content. ©2007 by The McGraw-Hill Companies. Purchase the book on Amazon.