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Article #413: Do's and Don'ts of Risk Management Sections

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There is no better way to convince a words, those that are inherent to the
potential customer that yours is the nature of the job.
right company for the job than to To drive this concept home, let's use an
demonstrate a true understanding of the analogy of a woman going through
risks the program will be up against and pregnancy and childbirth. Let's say that
to come up with plans to mitigate those there are things that educated pregnant
risks upfront. But in many proposals, the women know to do to maximize their
risk management section ends up as a chances of success, such as going to the
missed opportunity to shine at best and a doctor for exams, not smoking, and
setback at worst. Rather than showcasing getting good nutrition. Then, there are
a real knowledge and understanding of the also risks that could possibly occur due
program and proposed solutions, the risk to the nature of the process, such as any
section falls flat or actually does harm. number of medical complications that are
It happens for two reasons. One reason is common to pregnancy and childbirth that
that many proposal teams fail to put could affect the cost (medical bills),
enough time and consideration into schedule (carrying the baby to term), or
developing a solid risk section. They performance goals (giving birth to a
assign one author to write it and then healthy child). If a woman were to put
shift their focus to other work. What together a risk matrix for a proposal to
they do not realize is that great risk become pregnant, documenting the risks of
sections are usually born from hours of what would happen if she did not have
intensive brainstorming and input from timely medical exams or smoked would
every key player who truly understands usually imply her irresponsibility.
the program. Instead, the process by Documenting possible medical
which most risk management sections are complications inherent to the nature of
written leaves little room for success. pregnancy, such as gestational diabetes,
It is impossible for a single author to would demonstrate a thorough and
draw out and evaluate all of the thoughtful understanding of the risks.
program's risks. There are only three categories of risks
The second reason is that the wording of that should be presented in proposals:
many risk statements fails to represent 1. Risks caused by lack of information or
the company as an expert, and instead knowledge about the project that could
hurts the company's chance of winning. only be gained in the process of project
Often risk statements tend to follow this execution;
train of broken logic: "If we fail to 2. Risks caused by lack of control or
provide such and such (with "such and resources to deal with external events or
such" standing for something that is authorities; and
expected from any good company doing well 3. Risks caused by lack of time to
in this line of business), this horrible complete tasks sequentially and
thing will happen." For example, "If no methodically.
Customer Satisfaction Survey is If a company is bidding to perform a
established, there will be no feedback on project at a facility where no site
Service Desk performance, which may lead survey has been completed, an example of
to undetected systemic problems resulting a good risk statement would be that the
in lower customer satisfaction." Then, "Existing facility is not large enough to
the risk mitigation strategy is to support the required number of personnel
"Establish a Customer Satisfaction for the Service Desk function, which
Survey." This type of risk and mitigation could lead to inability to provide the
statement reads like an exercise in required services." The mitigation would
shooting oneself in the foot. then be identifying an alternative to the
Essentially, it says to the customer, "If existing facility in case the survey
we do not know what we are doing and we findings confirm this risk instance. "Not
fail to do what any decent company should getting environmental licenses and
do if it wins the bid, then we will regulatory approvals in time because of
fail." Do not offer a risk like this and the issuing agency's notorious scrutiny"
then couple it with a mitigation such as, is another example of a well-identified
"But we do know what we are doing." risk. A good mitigation could talk about
Consider another example where the risk expert bodies, relationships with the
is of "Equipment not identified early regulators and local authorities, and the
enough or critical equipment items not ability to design and build in accordance
identified," and the mitigation is with every possible standard.
something as rudimentary as "Ensure early It is critical to remember that the only
identification of long-lead items." Think way to come up with solid risk and
about this from the standpoint of the mitigation content is to collaborate as
customer. If the customer is choosing an an entire team, rather than tasking a
expert logistics company, and one of your single author. Even if there is no
company's key programmatic risks is that requirement for a separate risk section,
someone will fail to identify equipment risk analysis is still all-important.
in advance, what kind of image are you Discussion of applicable risks and
projecting? mitigation strategies also should be
The examples of "risks" cited above do included in each section, to showcase
belong in the proposal, but only as your understanding of the job at hand. In
elements of the technical or management your brainstorming session, it is a good
approach, and not as components of the idea to have a mediator who can point out
risk section. the holes and flaws in your risk ideas. A
A good "do" for risks is to avoid mediator will also ensure that you avoid
representing as a risk anything that is the pitfall of inadvertently stating as a
within your company's control as well as risk that your company is unfit for the
anything that any reasonably good company job, and then stating for the mitigation
would do in this line of business. The that your company is - go figure - fit
kinds of risks you need to show in your for the job. Make your risk statements
proposal must be those external to the work for you, since they can be pivotal
company's own abilities to plan and in convincing the customer that yours is
manage the program well, or, in other the right company for the job.






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