Best tips for risk management


Do's and Don'ts of Risk Management Sections

There is no better way to convince a
potential customer that yours is the rightTo drive this concept home, let's use an
company for the job than to demonstrate aanalogy of a woman going through pregnancy
true understanding of the risks the programand childbirth. Let's say that there are
will be up against and to come up with plansthings that educated pregnant women know to
to mitigate those risks upfront. But in manydo to maximize their chances of success, such
proposals, the risk management section endsas going to the doctor for exams, not
up as a missed opportunity to shine at bestsmoking, and getting good nutrition. Then,
and a setback at worst. Rather thanthere are also risks that could possibly
showcasing a real knowledge and understandingoccur due to the nature of the process, such
of the program and proposed solutions, theas any number of medical complications that
risk section falls flat or actually doesare common to pregnancy and childbirth that
harm.could affect the cost (medical bills),
schedule (carrying the baby to term), or
It happens for two reasons. One reason isperformance goals (giving birth to a healthy
that many proposal teams fail to put enoughchild). If a woman were to put together a
time and consideration into developing arisk matrix for a proposal to become
solid risk section. They assign one author topregnant, documenting the risks of what would
write it and then shift their focus to otherhappen if she did not have timely medical
work. What they do not realize is that greatexams or smoked would usually imply her
risk sections are usually born from hours ofirresponsibility. Documenting possible
intensive brainstorming and input from everymedical complications inherent to the nature
key player who truly understands the program.of pregnancy, such as gestational diabetes,
Instead, the process by which most riskwould demonstrate a thorough and thoughtful
management sections are written leaves littleunderstanding  of  the  risks.
room for success. It is impossible for a
single author to draw out and evaluate all ofThere are only three categories of risks that
the  program's  risks.should  be  presented  in  proposals:
The second reason is that the wording of many1. Risks caused by lack of information or
risk statements fails to represent theknowledge about the project that could only
company as an expert, and instead hurts thebe gained in the process of project
company's chance of winning. Often riskexecution;
statements tend to follow this train of
broken logic: "If we fail to provide such and2. Risks caused by lack of control or
such (with "such and such" standing forresources to deal with external events or
something that is expected from any goodauthorities;  and
company doing well in this line of business),
this horrible thing will happen." For3. Risks caused by lack of time to complete
example, "If no Customer Satisfaction Surveytasks  sequentially  and  methodically.
is established, there will be no feedback on
Service Desk performance, which may lead toIf a company is bidding to perform a project
undetected systemic problems resulting inat a facility where no site survey has been
lower customer satisfaction." Then, the riskcompleted, an example of a good risk
mitigation strategy is to "Establish astatement would be that the "Existing
Customer Satisfaction Survey." This type offacility is not large enough to support the
risk and mitigation statement reads like anrequired number of personnel for the Service
exercise in shooting oneself in the foot.Desk function, which could lead to inability
Essentially, it says to the customer, "If weto provide the required services." The
do not know what we are doing and we fail tomitigation would then be identifying an
do what any decent company should do if italternative to the existing facility in case
wins the bid, then we will fail." Do notthe survey findings confirm this risk
offer a risk like this and then couple itinstance. "Not getting environmental licenses
with a mitigation such as, "But we do knowand regulatory approvals in time because of
what  we  are  doing."the issuing agency's notorious scrutiny" is
another example of a well-identified risk. A
Consider another example where the risk is ofgood mitigation could talk about expert
"Equipment not identified early enough orbodies, relationships with the regulators and
critical equipment items not identified," andlocal authorities, and the ability to design
the mitigation is something as rudimentary asand build in accordance with every possible
"Ensure early identification of long-leadstandard.
items." Think about this from the standpoint
of the customer. If the customer is choosingIt is critical to remember that the only way
an expert logistics company, and one of yourto come up with solid risk and mitigation
company's key programmatic risks is thatcontent is to collaborate as an entire team,
someone will fail to identify equipment inrather than tasking a single author. Even if
advance, what kind of image are youthere is no requirement for a separate risk
projecting?section, risk analysis is still
all-important. Discussion of applicable risks
The examples of "risks" cited above do belongand mitigation strategies also should be
in the proposal, but only as elements of theincluded in each section, to showcase your
technical or management approach, and not asunderstanding of the job at hand. In your
components  of  the  risk  section.brainstorming session, it is a good idea to
have a mediator who can point out the holes
A good "do" for risks is to avoidand flaws in your risk ideas. A mediator will
representing as a risk anything that isalso ensure that you avoid the pitfall of
within your company's control as well asinadvertently stating as a risk that your
anything that any reasonably good companycompany is unfit for the job, and then
would do in this line of business. The kindsstating for the mitigation that your company
of risks you need to show in your proposalis - go figure - fit for the job. Make your
must be those external to the company's ownrisk statements work for you, since they can
abilities to plan and manage the programbe pivotal in convincing the customer that
well, or, in other words, those that areyours is the right company for the job.
inherent  to  the  nature  of  the  job.



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