SERIES ARTICLE
By Alfonso Bucero, MSc, PMP, PfMP, PMI_RMP, PMI Fellow
The Risk Doctor Partnership
Madrid, Spain
Senior managers and executives usually know that they are responsible for overseeing the company’s approach to managing risk. This involves the Board considering risk oversight policies and procedures, as well as regularly assessing corporate risk. They need to understand the expectations of regulatory bodies and ensure that the company’s approach reflects risk management best practices. The annual report should communicate risk-related lessons learned from past successes and failures.
Risk should also be an important part of board decision-making. If they get key decisions wrong, the impact will be felt across the organization, affecting a wide range of stakeholders. Risk management needs to be an integral part of the organization’s culture, strategy, and day-to-day business operations, and not just done for compliance reasons. Of all the challenges that boards face, perhaps the greatest is to navigate organizational growth while protecting the organization from unnecessary risk exposure.
We expect executives to know how to address risk at the corporate level. But do executives also need to understand how risk management works in projects? The involvement of an executive sponsor has been found to be crucial for project success, and their input throughout the project is important to the management of project risk.
- Initiating. The executive sponsor needs to work with the project manager to produce the project charter, ensuring that project objectives are SMART (specific, measurable, attainable, realistic, time bounded). The sponsor can bring experience of previous projects by referring to historical databases and other organizational assets before the project is launched. In this way, the executive sponsor can minimize risk that arises from badly-defined objectives, and ensure that previously-identified lessons are applied. The sponsor is also responsible for clearly communicating the risk thresholds for the project, and ensuring that these are documented in the risk management plan.
- Planning. The executive sponsor should support the project team as they gather requirements and define product and project scope. They must also check that the project vision, mission and objectives are aligned, and approve the project plan, to ensure that scope risk is minimized. The sponsor will ensure that the views of all project stakeholders are considered, and work with difficult stakeholders to minimize any risk of misunderstanding.
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How to cite this paper: Bucero, A. (2020). Executive Involvement in Project Risk Management; PM World Journal, Volume IX, Issue VII, July. Available online at: https://pmworldlibrary.net/wp-content/uploads/2020/07/pmwj95-Jul2020-Bucero-executive-involvement-in-project-risk-management2.pdf
About the Author
Alfonso Bucero
Madrid, Spain
Alfonso Bucero, MSc, CPS, PMP, PMI-RMP, PfMP, PMI Fellow, is an International Correspondent and Contributing Editor for the PM World Journal in Madrid, Spain. Mr. Bucero is also founder and Managing Partner of BUCERO PM Consulting. Alfonso was the founder, sponsor and president of the PMI Barcelona Chapter until April 2005, and belongs to PMI’s LIAG (Leadership Institute Advisory Group). He was the past President of the PMI Madrid Spain Chapter, and then nominated as a PMI EMEA Region 8 Component Mentor. Now he is a member of the PMIEF Engagement Committee. Alfonso has a Computer Science Engineering degree from Universidad Politécnica in Madrid and is studying for his Ph.D. in Project Management. He has 32 years of practical experience and is actively engaged in advancing the PM profession in Spain and throughout Europe. He received the PMI Distinguished Contribution Award on October 9th, 2010, the PMI Fellow Award on October 22nd 2011 and the PMI Eric Jenett Excellence Award on October 28th, 2017.
Mr. Bucero can be contacted at alfonso.bucero@abucero.com.
To see other works by Alfonso Bucero, visit his author showcase in the PM World Library at https://pmworldlibrary.net/authors/alfonso-bucero/
