Seven Habits for Highly Effective Project Risk Management

By Chris Bell.

When it comes to project management, over the years, the role of the Project Manager (PM) has evolved. Every project, large or small, comes with its own set of risks. As competition for bids increases, the ability to anticipate, acknowledge and create an actionable plan to address these risks becomes one of the most important elements in a capital project proposal.

For a long time, the PM position was highly focused on just the individual’s technical expertise. This is no longer the case. With the acknowledgement that project risk management is a crucial component of any undertaking, comes the increased awareness that on-time completion and remaining within budget is more about the successful orchestration and facilitation of others, than it is about technical knowledge.

What does that mean exactly? A report on the subject entitled “The 7 Habits of Highly Effective Project Managers” breaks down the habits that today’s successful PMs must learn in order to take their capital projects to the Best in Class level.

1)   Be proactive: Anticipate potential problems and put an early warning system in place. This should include a detailed project plan, good cost accounting or production reports that show historical performance and a well-prepared timeline to monitor schedule risk.

2)   Forecast completion: Begin a project with the end in mind. Firms are always looking at the forecast of the cost at completion and ensuring project trends are headed in the right direction. Setting key performance indicators via a dashboard or summary report is a great way to capture a picture of a project’s status at any time.

3)   Prioritize the critical path: Be able to identify key items that need immediate attention and which do not. Set milestones for issues that have come up frequently in the past, for example, complications during the closeout phase of a project.  Project risk management software is an easy and effective way to do this.

4)   Collaborate: Effective PMs know how to connect people to solve a problem or complete a task. Because there are so many off-the-shelf project risk management databases that provide visibility throughout the organization, there is no excuse for everyone not to be on the same page.

5)   Communicate often: Know how and when to communicate in the most effective manner. If it’s through email, in person, or both, establishing frequent and consistent correspondence will prove crucial to a project’s success.

6)   Be accountable:  The most successful PMs are so entrenched in their projects that any problem is their problem. The onus can’t be placed on anyone but the PM if a project is unsuccessful. This accountability can be achieved more successfully when senior management is actively involved in periodic, rigorous examination of the job’s status.

7)   Continuous improvement: Best in Class project leaders are constantly looking for ways to improve. Frequent analysis of how well they are doing and how they might do better is paramount to continued success.

So there you have it: seven simple habits that will aid in effective project risk management – and the keys to make or maintain Best in Class status.

Have anything to add? Leave your thoughts in the comments section.

About Chris Bell:

Having collaborated with technology titans such as Geoffrey Moore, Marty Cagan, Phil Meyers, and Keith Ferrazzi, Chris brings life and energy to technology and business topics such as Enterprise Risk Management (ERM), Project Portfolio Management (PPM) and Governance Risk & Compliance (GRC). Chris is passionate about leveraging technology and is often found on the speaker circuit sharing innovative strategies to solve everyday business challenges. He is also a published author of many articles, whitepapers and books including EVM for Dummies.

Chris leads marketing strategy, brand strategy and marketing communications for Active Risk. He holds a Bachelor of Science degree from Mansfield University, and has completed graduate work at Boston University, Oklahoma State University.