How to effectively manage project risk

Here’s a guest blog post I wrote for American University. There are a variety of project management resources that discuss risk management. Here I will introduce some of those resources. In particular, I will consider risk management in international development projects drawing on my personal experience in Afghanistan and the Dadaab refugee camps in Kenya and the extensive literature on the subject. Risk management does not only occur in settings where the risk includes threats to life and wellbeing, but in all projects such as business ventures or international development programming. Risks are merely events and conditions outside the scope of the project, including factors that affect financial considerations, time considerations, and general implementation of the proposed activities. What risks could prevent the project from being successful? The first step in any risk management plan lies in good project planning practices, including planning how to manage and identifying risks. First, what are the risks in the project? How will the team and project planners ensure minimizing those risks? By using a risk analysis table for identifying and recording risks, practitioners can structure brainstorming and mitigating (InterAction Security Unit, 2010). I previously taught at the American University of Afghanistan, and one of the risks was that students would not be able to attend given insecurity on the roads. The university, long before my tenure there, minimized this risk through offering dormitory housing close to campus and putting stringent security in place to ensure that students were safe once on campus. Despite best efforts, this risk continued to affect the delivery of education, the implementation of university courses as circumstances changed daily. This example highlights that risk management must consider how circumstances change. The second step to effectively manage project risks is to analyze potential risks through data collection and use that data to develop responses to risks as they arise. In the example above, this includes closing the university on days of extreme threats and staffing a team of experts in security (as is customary in Kabul). Analyzing risks more generally could include collecting qualitative data about what project stakeholders need or value related to the project. This data helps to ensure that the project successfully considers local realities. Quantitative data about project implementation or similar projects conducted by the organization or others working in the same context might also provide useful information about risks in order to develop responses. How do other organizations respond to similar risks? How does the implementing agency respond to risks in past experiences? These questions help identify strategies in risk response and contingency plans. Throughout the planning, data collection, and response development phases, we store the data and track risks to better understand what is occurring and changing. How effective are we responding to risks as they come up? Are we documenting them and creating a knowledge base of what risks have occurred? What trends do we see in this data so as to forecast potential future risks? Some monitoring and evaluation (M&E) plans, particularly logframes, require the considerations of the assumptions we make and risks we face in planning, implementing and evaluating. These tools are particularly helpful in developing risk management plans and recognizing what risks can be mitigated and responded to in the project. UNDP presents risk management as a cycle where monitoring and planning feed into each other around a results based model. USAID puts risks with assumptions in their logframes and have developed extensive materials on how to work in the field to identify, monitor, and minimize risks (USAID, 2012; USAID, 2013). These tools, coupled with sound project planning brainstorming and data tracking support effective risk management. References: InterAction Security Unit. (2010). Security Risk Management: NGO Approach. Retrieved from http://www.eupst.eu/html/FranceMat…. UNDP. (2011). Handbook on Planning, Monitoring and Evaluating for Development Results. Chapter 1, Section 1.2. Retrieved from http://web.undp.org/evaluation/handbook/ch1-2.html USAID. (2012). Technical Note: The Logical Framework. Planning Series. 2(1). Retrieved from http://usaidprojectstarter.org/sites/default/files/resources… USAID. (2013). Performance Management Plan (PMP) Toolkit. Retrieved from http://usaidprojectstarter.org/sites/default/files/resources/pdfs/PMP-Toolkit.pdf

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