Poor risk management has the ability to severely impact your business. Whether that’s due to a delay in projects impacting your revenue or unhappy clients leading to repetitional damage, poor risk management is something you can’t afford.
Below are a few of the most significant impacts of poor risk management and what you can do about them.
Project can become delayed when risk management activities take longer than expected or planned for. Unforeseen risks can also have an impact on project timelines, significantly showing down projects due to the time it takes to understand and analyse them.
What To Do: Early indication is important for avoiding delays. Set aside time throughout the project to prompt your team to identify new risks that could have an effect on the project timeline.
As with everything in business, risk management costs money. Budget overruns tend to happen when risks and the associated actions aren’t appropriately budgeted for. Overspends also occur when a risk hasn’t been identified.
What To Do: When calculating a budget, factor in the costs of anything that relates directly to the perceived riskiness of the project. Cover any mitigation or management activities in this contingency fund. This will help keep your project budget on track and avoid budget being used for ad hoc spending on risk management activities.
Clients don’t want to be involved in something that is perceived to be high risk. They need to know what you are doing to mitigate any potential threats and that you’ve got a sensible Plan B in place.
What To Do: Involve your clients in your risk management so that they know what professional steps you are taking to protect them and their investment. Regularly report on risks and what you are doing to monitor and manage them.
The points above can all in some way be attributed to poor user adoption of risk management processes. When your teams fail to actually follow a process, use the tools you have mandated and stick to the methodology, you’ll have poor results because your colleagues are not working to a standard, best practice way of managing risk.
What To Do: Any change to the way people work requires change management. Talk to the people involved about how they work. Make sure the process reflects your organisational culture and is workable within that model.
Bring in specialist risk managers to help. As risk management specialists we are able to help you identify, analyse and manage risks to your business. We can audit your processes and look at the best ways to prepare your teams to identify and handle risks that could affect the projects your business works on.
For more information or to book in a FREE risk management session, get in touch here!