Critical Success Factors for Project Risk Management

1. Involve stakeholder

In order to effectively manage risk, you should involve the stakeholders every step of the way, beginning with the initial risk assessment.

Stakeholders can include such as clients, beneficiaries, target group, employees, shareholders, etc.

Many of these individuals may be key personnel and are key to your risk management processes.

Each of these individuals represent different roles and responsibilities within your organisation, thus giving you a rounded representation of all the aspect of your business and each risk that comes along with it.

Critical Success Factors for Project Risk Management..

2. Tone from the top

The second risk management best practice and an important step in any successful risk management program is creating a strong risk culture.

Risk culture is defined as the values, beliefs and attitudes about risks by a common group of people.

It is the responsibility of management and the board of directors to clearly communicate the organisation’s culture and set the tone for compliance from the top.

Management buy-in is critical to ensure that the importance of risk awareness is emanated throughout the entire organization.

3. Communication

Good practice in risk assessment and risk management starts with communication

Key risks, or risks that would have a high organisational impact, are identified and monitored by all departments.

The organisation staff/ project team must create awareness of risks through communication in his/her respective unit or department

Critical Success Factors for Project Risk Management..

4. Clear risk management policies

There must be clear policies that respond to the following questions: oIs your risk management policy clearly documented?

Are the roles and responsibilities clearly defined?

oAre the procedure define mitigation of all identified risks?

Do you have a business continuity plan and an incident response plan in place that map out how your organisation will handle and overcome any unforeseen risks?

Are these policies communicated effectively to all employees?

▪Having these clear policies developed will help you
• Identify all potential risks that could affect your business • The likelihood and impact of those risks
• How you plan to mitigate and prevent those risks
• How you will monitor for and manage the new risks.

5. Resources

The organisation needs to provide the necessary level of resources if the risk management is to function properly.

These resources include people, time and money. Of these three, people are undoubtedly the most important.

The organisation should ensure that the team includes members with the necessary experience and skills to undertake effective risk management

Principles of Risk Management

The principles provide guidance on the characteristics of effective and efficient risk management, communicating its value and explaining its intention and purpose.

The principles are the foundation for managing risk and should be considered when establishing the organisation’s risk management framework and processes.

Various organisations have laid down principles for risk management.

There are risk management principles by;
International standardization organisation (ISO 31000: 2018) • Project Management Institute (PMBoK)
COSO 2004, 2017