Project management can certainly be a successful venture that leaves you feeling as if you’ve contributed in a great way to the completion of a project. It can improve relations with your team, and give you the confidence that you may require to get out there and acquire future project management employment.
There are risks associated with every job, and for every team member these risks will involve a different level of stress and exposure. Some risks can be fairly easily controlled while others will be entirely outside of the control of the team, but all risks should be assessed and a plan set up to eliminate or reduce the likelihood that they will come into play. Each member of your team should be involved in risk identification and then help to come up with ideas for limiting their threat to the ultimate completion of the project.
What types of risks could arise?
Depending on the specific details of your project, there are a variety of risks that could have an impact on your project and its outcome. We’ve listed a few of the most common ones below;
Performance risk- In this type of risk, the project does not live up to expectations and does not meet project specifications.
Cost risk- This type of risk is the result of a project costing more than the estimated expenses.
Schedule risk- In a schedule risk, the project takes more time than was originally expected.
Any one of these risks can spark the rise of another risk. For example, a schedule risk can lead to a cost risk; the extra time taken to complete the project can result in more labour costs or material costs. Each of the above risks can be reduced by a well understood plan of how the project will be run, and the expectations of each team member. Effective communication will also decrease the likelihood that any of these risks will derail your intended outcome.
Some other risks that must be taken into account;
Market risk- This might arise due to a change in interest rates, competition, or even foreign exchange.
Legal risk- If legalities and regulations aren’t followed, your project may result in a legal risk. This could also arise due to a breach of contract.
Strategic risk- This is fairly self-explanatory; a strategic risk results from an error in strategy. This could be a faulty game plan or even a product that doesn’t work as intended.
Operational risk- This risk could involve a failure in production of a product, its distribution to consumers, or process problems.
Governance risk- This type of risk involves the leadership of a company and how well it adheres to doing things in an ethical manner. It involves the reputation of the company and its management.
External risk- An external risk could include a flood, an earthquake, or some other type of natural disaster, as well as terrorism, vandalism and sabotage (whether external or internal).