Practical Project Risk Management
SERIES ARTICLE
By Martin Hopkinson
United Kingdom
Purpose
- Identify risks associated with a project’s strategy.
- Include the implications of project strategy risks in the decision making process.
Project Strategy Choices
There are competing ideas in the literature as to what the term project strategy means. For the purpose of this guidance sheet, project strategy can be described as being the outcome of choices that are fundamental to the project and that create the framework within which its solution and plan are developed. Examples of such choices may include:
- The project’s purpose and its relationship with its owning organization’s objectives.
- The identity and role of stakeholders, particularly if a project is co-owned.
- The means by which the organisation will provide resources to the project.
- The application of the organization’s governance and contracting processes.
- Critical assumptions that affect the project as whole.
Project Strategy Risks
This guidance sheet defines a project strategy risk as being the possibility that a project strategy choice causes significant adverse consequences. Project strategy risks usually have a widespread impact and can be a potential cause of project cancellation or failure.
Ownership of project strategy risks
Project strategy choices are usually made or authorised at a management level higher than the project manager. Ownership of the associated risks should be allocated at a management level that is commensurate with taking the appropriate mitigation action or accepting the risk.
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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. (2024). Project Strategy Risks: A brief guide, Practical Project Risk Management series, PM World Journal, Vol. XIII, Issue IX, September. Available online at https://pmworldlibrary.net/wp-content/uploads/2024/09/pmwj145-Sep2024-Hopkinson-Project-Strategy-Risks-brief-guide.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/
