4 Reasons Your Executives Don’t Take Project Risks Seriously

Risk management is a tremendously important element in moving a project from conception to planning to a successful completion. However, the executives and the project team don’t always deal with risk factors the same way. Some groups and organizations are more comfortable with risk, others want to avoid risk whenever possible. Using a single project management methodology across the entire portfolio can help to bring everyone onto the same page, but there still may be some lack of engagement from the leadership group when it comes to identifying risks, assessing their potential impact on the company, and determining the best way to address the issues going forward.

Project Risks

If you’re finding it difficult to work through risk assessments and mitigation planning with the senior management team, it’s time to examine the potential roots of the problem. Why doesn’t your executive team take project risks as seriously as you do? Each situation has its own nuances, but consider these 4 common reasons the senior staff might have a different view on risk.

1 – They don’t understand the risk picture.

Some executives push back on risk management efforts because they simply don’t have enough information to put the project risks into the proper perspective. On the surface they may acknowledge that a risk exists, but unless they have an accurate and detailed understanding of what that risk could mean to the project and its potential to interfere with the organization’s long-term success, they might choose to ignore the liabilities rather than make finding a solution a priority.

2 – They doubt the risks will actually come to pass.

Because individuals have such varied personalities, you may occasionally be faced with a senior leader or small group of executives that are either very optimistic or who simply have a comfort level that’s too high for reality when it comes to risk. Maybe their estimation of the weight the risk carries is different from yours. No matter the underlying cause, the end result is that if the executive team doesn’t think the risks will materialize, they’re unlikely to go through the process of developing a plan to deal with them.

3 – They think you’re blowing things out of proportion.

Occasionally there’s a disconnect between what you’re telling the executives about potential risks and what they’re hearing. Previous project experiences could be influencing their judgement or they may have worked with a project team at another company that didn’t communicate risk data adequately. It’s also possible they haven’t had a lot of exposure to project risk management efforts and they aren’t sure how to process the information you’re giving them. This could leave an executive without enough background to fully understand the type of roadblock risks present to a good project outcome. Regardless of why it’s happening, any time the senior staff doesn’t have faith in a PM, there’s sure to be trouble ahead.

4 – They expect you to fix whatever goes wrong.

This can be one of the most discouraging scenarios. Even when an executive agrees that risks exist and that they must be managed, they may not acknowledge your concerns because they assume you and your project team will handle any problems that come your way. The issue is compounded if they also expect you to address risks on the fly, meaning they drag their feet when asked to participate in risk mitigation planning or they refuse to authorize funding or other resources intended to move risk management efforts forward. Not only does all of this make a PM’s job much more difficult, the lack of support can also be very demoralizing for the team.

 

PMAlliance offers project management consulting, training and portfolio management services.

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