Book SummaryIdentifying and Managing Project Risk, by Tom Kendrick

1-Page Summary1-Page Book Summary of Identifying and Managing Project Risk

Crucial tactics for handling unpredictability within project scopes.

The text underscores the importance of incorporating practices for managing risk throughout each stage of the project's lifecycle. Tom Kendrick stresses the importance of embedding risk management into the core processes of initiating, planning, executing, and monitoring a project, rather than treating it as a separate or isolated task.

Integrating risk management strategies for the full span of the project.

Kendrick underscores the necessity of formulating strong risk management approaches from the outset of the project and ensuring their steadfast application throughout its lifespan. He advocates for a proactive approach that consistently involves pinpointing, assessing, and mitigating risks right from the project's outset, during the entire project portfolio management, its organization, execution, and finalization.

Incorporating risk assessment into the selection of projects and the management of the entire project portfolio.

Tom Kendrick highlights the critical nature of recognizing the interconnection between projects and an organization's overall activities, underscoring the vital connection between risk management in individual projects and the overarching duties of selecting projects and overseeing the project portfolio. He emphasizes the importance of a strong project portfolio management approach that utilizes risk assessment as a central factor in choosing projects that are in harmony with the organization's objectives and its capacity to handle risk.

The significance of evaluating potential risks when selecting a project and its role in the decision-making process.

Kendrick suggests that selecting projects is naturally filled with significant risks. Organizational mismanagement, unrealistic expectations, competition for limited resources, unattainable deadlines, and misaligned priorities can all contribute to a project's failure from its inception. He emphasizes the importance of carefully evaluating potential risks when choosing projects in order to identify and prioritize those with achievable goals and manageable risks.

Incorporating risk management strategies into the wider framework of project planning.

Kendrick underscores the importance of embedding risk management tactics consistently across all phases of the project, from the beginning through its delineation, organization, execution, and oversight stages. He underscores the necessity of developing a well-defined approach to risk management that considers the stakeholders' appetite for risk, the goals of the project, and the organization's conventional practices for dealing with uncertainty. A thorough approach must encompass the identification of potential risks, assessment of their probability and impact, development of strategies to reduce them along with contingency plans, and continuous monitoring of these aspects throughout the project's duration.

Assessing the validity of dedicating resources to risk management by weighing the potential advantages against the related expenses.

Kendrick acknowledges the importance of allocating sufficient resources, energy, and duration to activities related to managing risk. He provides guidance on justifying these investments by demonstrating the substantial benefits that risk management can provide, such as reducing the likelihood of project failure, minimizing rework and costly delays, improving project control and decision-making, and enhancing overall project management practices. He advises conducting a comprehensive assessment to determine whether the advantages gained from risk information are worth the expenses associated with risk management activities, thereby enhancing the likelihood of project success.

Creating a risk management strategy that is in harmony with the project goals and the risk acceptance levels of the stakeholders.

Kendrick underscores the importance of understanding the degree of risk associated with project uncertainties that stakeholders and project sponsors are prepared to accept. He recommends encouraging open and honest dialogue to uncover stakeholders' viewpoints on risk and their strategies for managing uncertainties. This information will guide your all-encompassing approach to risk management. Stakeholders with a lower tolerance for risk necessitate the adoption of thorough planning, change management, and detailed quantitative analysis of potential uncertainties. On the other hand, even for speculative projects with tolerant stakeholders, adopting a systematic method for risk management can assist in navigating clear of preventable hurdles and improve the chances of achieving the project's objective successfully.

Establishing a structured approach to oversee risk within a company.

Kendrick emphasizes that entities recognizing the importance of steering through uncertainties and that have set up a supportive structure for mitigating risks achieve improved effectiveness in their strategies for project risk control. This infrastructure includes education and training, processes for capturing and sharing lessons learned, systems for collecting and analyzing risk data, and mechanisms for identifying and managing organizational biases.

To enhance understanding and control of risk, it is crucial to invest in educational programs and provide comprehensive training, along with offering guidance and mentorship.

Kendrick recommends participating in different learning opportunities, like seminars and training programs, to enhance one's skills in risk management. He recommends setting up informal lunch meetings for project managers to share knowledge, collaborate on effective risk mitigation strategies, and create a cohesive approach to risk management across the company. He underscores the significance of creating advisory partnerships between experts with extensive project experience and individuals who are just...