Project management: How to adopt a risk-centric approach

Mega projects have grown in size and complexity in recent years. As a result, the risk exposure of many contractors has increased significantly.

For project managers, no longer is it enough to rely on risk management software to guide their reporting and mitigation activities. A risk-centric approach to project management is needed.

Project managers need to guard against a natural tendency to be overly-optimistic. They may be inclined to underestimate costs and overestimate benefits, just to ensure a plan is implemented. This is a high-risk way of thinking however, and a proactive approach to risk management can result in better outcomes for all project stakeholders.

Look for red flags
Project managers need to look for red flags, which may indicate under investment in risk management. Other indicators might include the lack of a specialist team/dedicated budget for risk management and analysis or insufficient emphasis on risk during monthly progress meetings.

Consider relaunching the risk management function
By moving risk up the agenda, project managers will be better placed to assess risks and implement mitigation strategies. Where appropriate, project managers should consider relaunching the risk management function, whilst ensuring that sufficient budget and resources are in place, can help to boost project management outcomes.

Assess risk lifecycle
Risk is inherent in every aspect of a project and should be measured according to its lifecycle. On large-scale projects, effective risk management processes can help project managers to appreciate the bigger picture; spotting interdependencies and potential impacts on construction methodologies.

Focus on risk reporting and modelling techniques
A robust Risk Breakdown Structure (RBS) and risk-modelling techniques can also assist project managers in recognising and prioritising mitigation activities. This structure acts as a framework or checklist for categorising and scoring the risks that apply, helping to ensure all potential sources are considered and appropriate measures put in place to address them.