Indy Risk School

Shooting The Messenger

Often, Risk Memos are perceived as "negative" and, in fact, do focus on what can go wrong rather than what can go right. However, it is important for the project manager and the Project Sponsor to realise that proactive reduction of risk before the project starts is more effective and less expensive than re-active reduction of risk impact during the project.

By estimating the costs [people, dollars, time lost] of non-containment of the risk factor, the project manager can often help focus executives on the added value of proactive risk reduction.

The pro-active reduction or elimination of risk in a project is a classic case of "win-win". The project's sponsor and clients win as they have a higher chance of success, the project manager and team win because they have a higher chance of success and a lower level of pain in the project.

What is significant is that many project managers, like Indiana Jones, face risks in their projects that are beyond their capability (organizationally, politically and financial) to control and manage. The technique of Risk Memorandums enables the people within the organization with the right level of power the assist the project manager in managing the risks.

Should the Project Sponsor choose to ignore the Risk Memo and fail to assist the Project Manager in implementing the risk reduction strategies suggested, then, in the worst case, the Project Manager has performed their role in a professional manner. It is our experience, that the re-delegation or "buck-passing" of risk management to Project Managers is common.

The use of the associated analysis of Business Risks may help to obtain executive buy-in into the Risk Management process for projects. If by failing, a project may result in the C.E.O. having to defend his or her organisation on a T.V. current affair program, the C.E.O. may be a bit more interested in assisting in pro-active risk avoidance.

Fig. 5 - Risk Memorandum

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