January 2023

How Certified Enterprise Risk Managers Can Make a Crucial Contribution to the Success of New Business Projects?


We take and manage risk to seek reward and achieve objectives. All projects involve risk, some more so than others, but risk should be understood as meaning uncertainty, which covers both threats and opportunities. Inbuilt into every project planning process should be the creation of a project Risk Management Plan (RMP), or a subset of the project management plan, to define how the project team will take and manage risk. An RMP should be put together by a project risk coordinator, who is appointed early in the projectís life by the project manager as the project team structure is being defined. Whether the risk coordinator is a full-time or part-time role on your project depends on the projectís nature and size. Many high-risk large projects employ a full-time risk manager. Whether it is a full or part-time role, the coordinator needs to liaise with all project disciplines and be the glue ensuring that managing risk is done cohesively and collaboratively, not in functional silos. If your organisation has a central risk function, they should support the risk coordinator. They can provide guidance for the RMP and perhaps include them in any risk championsí network to provide mentoring and skills development.

THE PLAN

Risk managers need to include four critical elements in the RMP. First, set out how all disciplines/ teams on the project will manage risk in a coordinated and common way, focusing on achieving project objectives. Second, specify roles and responsibilities for taking and managing risk. That includes defining a governance structure to oversee this activity, including deliverables for phase and gate reviews. Third, articulate how the management of risk will be embedded into the rhythm of everyoneís activities, as part of the teamís culture. And finally, describe how you will leverage your organisationís knowledge and resources, such as central personnel, lessons learned from other teams, templates, tools and techniques. The team environment and culture is a defining influence on how a project team takes and manages risk. It is important to ensure that peopleís attitudes and behaviours to risk are aligned with the objectives of the project, and that team members are clear on what is expected of them. The teamís understanding of its risks must be consistent with how these risks are being communicated and discussed with the projectís parent organisations and other stakeholders. At the earliest possible time Ė this should be described in the RMP Ė the risk coordinator should assist the project leadership team in applying recognised good practices to ensure a healthy environment and culture. The IRMís practical framework for establishing and maintaining a healthy team environment and culture is helpful here (Risk culture, resources for practitioners is free and can be downloadedfrom the IRM India A

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