Risk management can do far more than simply flag up potential problems. It’s a fundamental way of working that changes how your business and your teams operate. When you have risk management embedded in the way you work, you can use it to break down silos, improve communication, engage senior managers and more.
In this article we look at 5 common challenges for leaders and how risk management can support your approach to dealing with them.
1. Organizational Silos
Let’s not pretend that organizational silos don’t exist. However, good project risk management processes can definitely help break down the barriers between teams.
Cross-functional teams should be involved in risk identification at the beginning of a project, and then ongoing throughout the project life cycle. Teams made up of all affected departments should review requirements and assumptions together to make sure that everything is fully understood and covered off. This cross-team working is really effective in creating a team spirit at the start of a project and building relationships that will help the team be truly productive as the project progresses.
When the teams work together like this they can identify risks to each others’ areas and help flush out where there might be problems integrating upstream and downstream deliverables.
Risks often have an impact on more than one team and working outside of silos to identify and deal with them will ensure that you’ve got the best possible approach to dealing with the risk – not just the mitigation activities that seem best to one department.
2. Poor Communication
Poor communication is something we see often on projects and risk management processes might seem like a surprising way to address this. However, when your risks management works well, communication across the project is improved.
This happens because there are clear paths to follow. Teams know who to go to when hey spot new risks and everyone is encouraged to take part. Teams know the names of the risk owners so they can direct updates and information to the right people.
Risk review meetings help keep everyone up to date with the same information and the process of documenting and acting on the risk means there is no space for miscommunication: everyone has access to the same set of data and follows the same process.
3. Unengaged Leadership
Project teams often don’t have the support of senior business leaders when it comes to risk management. It’s seen as something that project managers can handle themselves and there is no need to get involved.
However, that approach can be problematic because sometimes the guidance of senior leaders is essential for making the right decisions about how to handle a project risk.
Risk management processes alleviate this because they state when project sponsors and other senior leaders should be involved in the process. You can use your processes to set tolerances around what a project team can deal with themselves and what needs input from the sponsor. You can get customers and other stakeholders involved in risk review meetings to help broaden the discussion and find creative approaches for dealing with risk.
All of this supports the involvement of the right people at the right time, ensuring that the project team gets the engagement they need to move the project forward in the right way.
4. Unrealistic or Misaligned Expectations
A lot of project conflict and disappointment comes from various team members or senior leaders having different expectations of what the project can deliver.
Risk workshops can help this because, with other project management tools, they help get everything out in the open. You can frankly discuss what might cause the project problems and then actively plan to prevent that. There is nowhere to hide or to pretend that the difficulties aren’t really going to cause an issue.
This improved communication about what the project can realistically achieve within the constraints will help keep everyone on the same page and reduce misaligned expectations.
5. Hiding Bad News
In some businesses we see a culture where sharing ‘bad’ news is discouraged. As a result of what they see and the behavior of the leadership, project teams are reluctant to talk about things that might be going wrong on their projects. They would rather try to fix the issues themselves than have to confess that something might not be going to plan or that they’ve spotted something that might cause a problem in the future.
This in itself is a problem for leadership because if you don’t hear about the issues you can’t support teams to put them right. It also leads to poor decision making from senior managers because they don’t have accurate information about the state of projects. If they aren’t clear on the risk profile of a project because the team have preferred not to share that information, then they aren’t basing their decisions on the best information possible.
Risk management can address this by getting the ‘what ifs..’ and worries out in the open. Risk identification workshops are a neutral ground to discuss potential problems. The process is there to support, facilitate and encourage the raising of risks so that no one should feel as if they have to keep their concerns to themselves.
The escalation mechanism inherent in good risk management processes allows project teams to identify what should go to the next level of management and to feel empowered to raise concerns up the chain.
Regular risk reviews help identify new concerns and show that existing risks are being proactively managed.
These 5 common challenges are things we see time and time again across all industries and business types. They aren’t things that you have to put up with. You can improve the way you work, and risk management is a great way to get started.