Managing Project Risk
Managing Project Risk is an oft utilised term by Project Managers that sounds very informed, but when pressed on what it means in practical terms, you more often than not come up against lovely motherhood statements and platitudes that make risk seem like some mysterious element that only the Project Manager knows about.
Managing Risk comes down to two clear and defined elements –
· Knowledge
· Proactiveness
Knowledge
In property development and investment terms, knowledge is simply having an understanding of the full project process. This deficiency is highlighted most often between the Project Manager who was “raised” at the front end of the property development process (Development Management), and the one who was “raised” at the construction end of the project (Project Management).
It is important to understand that both phases require different skills, both in expert knowledge and in personality type, and being able to manage different types of people. Problems arise when Development and/or Project Managers don’t accept that they may lack skills in certain areas of the whole development management process. They do this because they want to be seen as “experts”.
An arrogant man knows everything…a wise man knows he doesn’t.
Proactiveness
Knowledge and Proactiveness must work together. Without knowledge, or surrounding yourself with the people who have the knowledge, then you can’t be proactive because you simply don’t know what lies ahead.
Understand the property development process, understand what are the pitfalls and areas that can make or break a project, and put actions in place to either prevent the worst case from happening, minimise the downside risk, or be flexible enough in your management style to be able to change direction in the middle of a development.
As a Project Manager, being proactive is also about Change Management. To be proactive means needing to make changes during a projects’ lifecycle, which is good, but the great project managers are then able to communicate with and motivate the team, such that they are all moving in the same direction.
John Rosel