Risk is a fascinating subject and one of my favorite things to work on because, in the end, you find a solution for your concerns and a plan of attack for your expectations and hopes. That means that at the end of the analysis, when you have come up with your risk responses, you have a roadmap to address the threats and opportunities to your project. This exercise is essential to achieving success at a project level but also at an organizational level since the threats can affect the bottom line negatively. In contrast, the opportunities can positively affect the bottom line by increasing profits.
There are various theories regarding how to approach risk, including whether you need to or not if you have a small project. Still, I believe that all projects already need some level of scrutiny regarding risk. For example, we have all faced the dilemma of working beyond our comfort level regarding scope. Sometimes this manifests itself by not having enough staff to take on a new project, so we decide to hire someone quickly or outsource some work. Other times, the risk might be that the work is not precisely within our expertise level, but we feel we could do the work anyway. In other words, we challenge our comfort level, a type of risk. Therefore, we identify the risk, decide how to proceed, and, at least mentally, create a risk response in case something goes wrong or extremely right. The latter means that we do such a great job that a positive risk (opportunity) appears, and we have more work than we can handle. So, since we already perform a risk analysis, why not standardize it and make it part of our daily work.
For example, I am currently working on a new project with extremely straightforward civil work. That part could not be any easier and, therefore, well within my level of expertise. However, the administrative, managerial and bureaucratic parts are quite different from what we are used to. At the same time, if we do well on this project, which I feel we will, it will open up a brand new segment of work for our firm and something that we feel strongly about, which is designing and constructing a sustainable built environment. Therefore, we ran a detailed risk analysis to identify everything that could go wrong (threats) and what could go right (threats) and, after weighing the probability ratios and impacts, determined that the outcome would be to our advantage if we were vigilant. This means that we detailed not only the risks we identified but also the triggers to those risks to strengthen the ones we want to see materialize, as well as meet the ones we are trying to mitigate head-on.
At PM Workshops, we are fortunate to have qualified staff with extensive experience in risk management across many fields, including banking, real estate, engineering, construction, manufacturing, and many other sectors.