A risk management team is a separate and often independent unit within the project management team headed by the risk manager or the chief risk officer. It helps place a value on the projects activities . The role of a risk manager is to communicate risk policies and processes for an organization. They provide hands on development of risk models involving market, credit and operational risk, assure controls are operating effectively, and provide research and analytical support.
When a project assumes some risk, it is normal and there are ways to litigate the risk to make it okay. Disclaimers and other legal methods can be put in place. However if the risks exceed the scope of risk which these methods can mediate, it is probably time for the project to be shut down. The risk management team is in charge of deciding this and telling the person in the company who is in charge of risk management. Depending on the corporate structure, either the project will end there, or an executive will shut it down once they find out how risky the project is because they don't want to risk everything they've worked for just for a single project most of the time.
A checklist of common risks may be used to identify risks in a project
Technology risks. • People risks. • Organisational risks. • Requirements risks. • Estimation risks.
Risk is something that is very hard to quantify and accurately describe before the product goes out into the public because it is impossible to prepare for every single eventuality. The grey area is also something that is really hard to address because humans are all biased in some way or another. When the boundaries of risk get pushed it is then important for members of the team to make sure that those boundaries are being pushed for the right reasons. We as humans can get attached to things and see their success as reflections of us and our abilities. This can happen in industry where a project managers wants a project to succeed so much that they are willing to push boundaries in a dangerous or unethical manner. It is here that either oversight from a superior or recognition from members of the project team should come into play. Someone has to step up and take a more objective approach to determine if the project is being given a lower risk because of the true risk of the project or because someone is attached to it. These kinds of mistakes can be dangerous as they may result in a product being tested that is not ready and could hurt people or the company. Obviously there would be severe repercussions for the PM who made that mistake, but I would hope that the people surrounding the project would have the willingness to stand up to ensure that the risk is assessed correctly.
Risk management is the process of measuring and evaluating risks and developing strategies for managing them. These strategies include transferring risks to another entity, avoiding them, reducing their negative effects and accepting some or all their consequences.
The traditional risk management focuses on the risks arising from material or legal reasons for example: natural disasters or fires, accidents, death and lawsuits
On the other hand, financial risk management focuses on those risks that can be managed using financial barter tools.
Regardless of the type of risk management, all major companies as well as groups and smaller companies have a dedicated risk management team that can help in minimizing the risks and deal with them in the right way
But,I think not to shutdown a project unless its something very risky and cant be controlled .
Effectively managing a company’s risk is a multi-step process, ranging from an initial risk exposure analysis to identify coverage gaps to updating plans to adapt to a company’s growth or change in operations.A risk management team is a independent team in an organisation that intentionally
undertakes to understand and reduce risk effects.
Executing these activities efficiently and in a way that
actually and demonstrably improves the ability of the
organisation to meet its objectives in a repeatable fashion is called Effective risk management.
Risk management team must have different principles such as create value, be transparent, be Responsive to changes more than other teams, and continuously re-assessing. I believe in real life we have more examples from big companies where they kept going with High risk projects and they failed, such as Kodak were they were not ready when change happened. However, Having a Risky project does not always have a negative impact it can also be a Positive Risky project which can lead to new Opportunity.
In the lecture slides this week, we learned about all things risk management. Starting in the planning phase, a part of DDP is to do risk analysis to determine the probability some undesired consequence will occur in order to decide whether or not to do a project. Risk Management looks at all areas of a project, and specifically how something can fail, the severity of the consequences, and the probability of occurrence. All of this is handled by the "Risk Management Team." The risk management team is apparently often comprised of the same people who are on the project team. My question stems from the seeming lack of rigid guidelines based on risk. There is obviously a grey area on when to shut down or continue a project with assessed risk, but when the project leader / risk team leader has a personal connection to the project, are there times where this grey area is stretched much farther than it should be in order to keep going with a risky project? And what happens to those projects?
There isn't so much of a gray area when it comes to shut down/ continue a project based on personal connection to the project as there is a gray area as to see how long the project can go for based on the projected risks. The whole point of risk management is to minimize risk and maximize benefits; however, risk is subjective depending on the situation and who calls the shots based on the risks. If there is high risk of a product failure, such as an implant not being able to take the load or can break easily if there is too much pressure applied after testing is done, then these findings will have to be presented to management and re design accordingly. If the project is too risky even after prototyping and doing clinical studies, it shows that there may not have been much thought going into the project during the planning/ initiation phase to begin with, and it may have to be cut.
In the lecture slides this week, we learned about all things risk management. Starting in the planning phase, a part of DDP is to do risk analysis to determine the probability some undesired consequence will occur in order to decide whether or not to do a project. Risk Management looks at all areas of a project, and specifically how something can fail, the severity of the consequences, and the probability of occurrence. All of this is handled by the "Risk Management Team." The risk management team is apparently often comprised of the same people who are on the project team. My question stems from the seeming lack of rigid guidelines based on risk. There is obviously a grey area on when to shut down or continue a project with assessed risk, but when the project leader / risk team leader has a personal connection to the project, are there times where this grey area is stretched much farther than it should be in order to keep going with a risky project? And what happens to those projects?
I find this to be a very great question. It is very important for project managers to have a high interest in the project they are working on. No department or tasks should be more important than the other. At the same time, the overall goal is to make the best decisions for both the project and stakeholders involved. Although one may have extreme faith that a project will succeed due to lack of finances, unsuccessful trials, lack of communication, or even not being able to meet deadlines, they need to realize when to end a project for the sake of long term consequences. On the bright side, if a project does fail, it is easy to review the factors that contributed to the downfall of the project and develop a new plan. For a project manager who has a personal connection with a project, redoing a project will not be easy in anyway possible, but if they have such faith, they will have to find the patience and courage to finish what they started.
By implementing a risk management plan and considering the various potential risks or events before they occur. This ability to understand and control risk enables organizations to be more confident in their business decisions. Furthermore, strong corporate governance principles that focus specifically on risk management can help a company reach their goals.
