Practical Project Risk Management
SERIES ARTICLE
By Martin Hopkinson
United Kingdom
Purposes
- Provide a simple means of differentiating between higher and lower risk projects.
- Avoidance of applying the same management approach to both high and low risk projects.
A Simple High-level Checklist
Some projects are exposed to much higher levels of risk than others, often because risks may be difficult to identify or quantify before project approval. This six-point check list is designed to help differentiate high risk projects from others:
- Project size: large teams may cause poor communication and a lack of clarity about responsibilities, information and decisions, leading to omissions, mistakes and weakened risk disclosure.
- Project duration: on very long projects, there is a longer time window over which key assumptions may be undermined or during which unexpected events can occur.
- Novelty: products or methods that are being used or developed for the first time either at all or by the organization involved, are a frequent cause of emergent risk.
- Project complexity: the implications of interdependent project work strands or difficult combinations of requirements may be hard to understand in advance.
- Multiple stakeholders: differences between stakeholders’ interests can be a source of counterproductive behaviour with consequences that are difficult to forecast.
- Political imperative: Government or internal organizational pressure can create a project environment that fosters estimating bias and failure to acknowledge risk.
Exceptionally problematic projects often have many and sometimes all of these characteristics. Typically, their problems are experienced as being emergent risks and issues identified after the main project approval decision or as being the unexpected effects of systemic risk.
More…
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Editor’s note: This series of articles is by Martin Hopkinson, author of the books “The Project Risk Maturity Model” and “Net Present Value and Risk Modelling for Projects” and contributing author for Association for Project Management (APM) guides such as Directing Change and Sponsoring Change. These articles are based on a set of short risk management guides previously available on his company website, now retired. For an Introduction and context for this series, click here. Learn more about Martin Hopkinson in his author profile below.
How to cite this paper: Hopkinson, M. (2022). Identifying High Risk Projects: A brief guide, Practical Project Risk Management series, PM World Journal, Vol. XI, Issue VIII, August. Available online at https://pmworldlibrary.net/wp-content/uploads/2022/08/pmwj120-Aug-2022-Hopkinson-identifying-high-risk-projects-risk-management-series-article.pdf
About the Author
Martin Hopkinson
United Kingdom
Martin Hopkinson, recently retired as the Director of Risk Management Capability Limited in the UK, and has 30 years’ experience as a project manager and project risk management consultant. His experience has been gained across a wide variety of industries and engineering disciplines and includes multibillion-pound projects and programmes. He was the lead author on Tools and Techniques for the Association for Project Management’s (APM) guide to risk management (The PRAM Guide) and led the group that produced the APM guide Prioritising Project Risks.
Martin’s first book, The Project Risk Maturity Model, concerns the risk management process. His contributions to Association for Project Management (APM) guides such as Directing Change and Sponsoring Change reflect his belief in the importance of project governance and business case development.
In his second book Net Present Value and Risk Modelling for Projects he brought these subjects together by showing how NPV and risk modelling techniques can be used to optimise projects and support project approval decisions. (To learn more about the book, click here.)
To view other works by Martin Hopkinson, visit his author showcase in the PM World Library at https://pmworldlibrary.net/authors/martin-hopkinson/
