Relating Project Risk Management To Enterprise Risk Management
Every project is unique; no project is exactly like another, even if similar activities have to be undertaken to achieve their completion. In a dynamic business landscape, nothing stays the same. The project objectives may vary; the team undertaking it may have more or fewer members than the previous team; the experiences and resources they bring to the project will be different; even the timelines will vary; and the environment may be unrecognisable since the last project – even if it’s only been a matter of months. Project managers are therefore as unique as the projects they manage, and they have to be versatile.
This is one area where the work of PMs may intersect with that of CROs. At its core, project-managing is strikingly similar to risk managing, and many risk management techniques and tools can be applied to project management. However, the responsibility for identifying and managing project risk should not be delegated to the risk manager. That is very clearly the responsibility of the Project Manager. The CRO or risk manager’s role in project management should be one of supporting the project manager, with the application of appropriate ERM techniques. Project planning inevitably begins with a think-through of resources and timeframes as soon as the objectives have been set. Ideally, the timeline is then determined and the costing is drawn up.
But in reality, all this rarely happens within an acceptable timeframe. Things are invariably behind schedule even before they are scheduled, and there are never enough resources Because projects are as unique as they are variable, PMs have to be comfortable wearing many hats, and cannot afford to take any of these roles lightly. A project manager’s life is never easy. Tasks that are inevitably on the PM’s plate include not only supervising the project but providing training to team members who may be new to the work. The PM is also a key contact point for vendors, suppliers, sub-contractors.
Besides the actual work of project-managing, some of the roles that a PM has to play include that of motivator, cheerleader, disciplinarian and listener. Some of this may be required even before the project takes off! And then there are resource and budget constraints, and a timeline to manage. If all this sounds familiar, it may be because similar efforts are required of CROs and risk managers in the course of getting their work done. An effective PM usually finds him/herself interacting with staff at all levels of the organisation, from the C-Suite to line workers – very similar to what the CRO or risk manager has to do, in the course of his/her work.
How does a company go about selecting a PM? Project-managing experience is always a big plus, but experienced PMs are few and far between. The organisation may want to identify someone proactive who understands what the project needs and be able to “roll with the punches” according to the nature of the project. Not only does the PM initiate project implementation, he/she has to continuously monitor and review the project, and make readjustments when necessary. Indeed, project-managing is an endless round of delegation, supervision, interaction, review, monitoring and readjustment, until the project is done.
To further complicate matters, projects rarely follow scheduled timelines. There are inevitable delays, substitutions which contribute to delays, staff turnover to deal with, and a myriad of other factors that thwart the project’s completion. Yet, the PM is expected to keep it running and deliver results – which is where experience is invaluable. PMs who have “been there, done that” know where the potholes lie, and can anticipate setbacks. They would have, from the outset of the project, carried out due diligence in order to identify the possible red flag zones. They continue doing this throughout the duration of the project.
An integral part of planning is the constant flow of reliable information. The PM basically functions as the Risk Manager for the project where anticipating barriers to the realisation of the project is concerned. Correct, robust information is critical especially since dynamic environments are the norm. Continual adjustments are necessary to ensure the project moves along and sticks as close as possible to schedule. But in today’s dynamic environment, even the project’s original objectives may change or have to be redefined as it progresses.
Once the project is up and running, these factors will also dictate how fast, agile and flexible a PM needs to be. In the course of the work, one pitfall that will be particularly difficult to avoid will be scope creep – when more and more work starts to end up on the PM’s plate. Although the PM is expected to have a handle on everything, he/she cannot be expected to micro-manage; that is for team members to do. Successful project-managing is the result of concerted, focused team effort. And successful PMs are those who achieve project objectives through empowering their respective teams and leveraging on team talent.