Continually evaluating exposure to risks, both opportunities and threats can maximize positive impacts and minimize negative impacts to the project and its outcomes. All lessons are based on the PMBOK®, 7th Edition.
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Understanding how to respond to any risks helps not only you but the project team and stakeholders feel confident that you understand the project. I’m your host, Kaye B and let’s first define Risk.
A risk is an uncertain event or condition that, if it occurs can have a positive or negative effect on one or more objectives. No, you may not see or identify every risk there is, and even risks that you identify may not actually happen in a project, but it is up to the project team to evaluate any known and emergent risks, both internal and external to the project, throughout the lifecycle.
We should look to maximize positive risks which are opportunities and decrease exposure to negative risks which are threats to a project. Opportunities can lead to benefits such as reduced time and cost, and increased market share and threats can be things like cost overrun, technical failure and delay in delivery.
Effective and appropriate risk responses can reduce individual and overall project threats and increase opportunities. Project teams should consistently identify potential risks responses with the following characteristics in mind: appropriate and timely to the significance of the risk, cost-effectiveness, realistic within the project context that was agreed by stakeholders and it is owned by a responsible person. One thing to note, risks occur not only at the project level, but also at the portfolio, program and product so as a project manager, you should look at how a risk can affect all aspects of the organization.
That is your PMP in 60 seconds. Next week we’re talking about embracing being flexible and resilient on projects.