Evans Incorporated

Developing A Positive Risk Culture

By Ryan Burke, PMP, RMP

One surefire way to derail a highly-functioning risk management process is by creating or enabling a negative risk culture within your organization. Upon beginning a project, one of the first steps that should be taken is to conduct a risk culture analysis to identify the most prevalent type of risk attitude within the project team. Often times multiple risk attitudes will be present.  It is the responsibility of the Risk Manager and the Project Manager to create a positive risk culture within the project that sees risk management as a tool that will increase the likelihood of achieving project objectives, rather than a sign of a poorly managed project.

When conducting the risk culture analysis, the key stakeholders within the project will be placed within one of the following risk attitudes:

Risk Averse – Not comfortable in dealing with risk. Will take steps to avoid risk rather than deal with developing unique mitigations. This can lead to cost and schedule delays as project plans are changed to avoid risk.

Risk Taking – Very comfortable in dealing with risk.  Will often seek out risks based on the opportunity that they present. Excessive optimism about risks can often lead to negative impacts as the project takes on too much risk, or does not properly managed the mitigations.

Risk Neutral – Neither risk averse nor risk taking. Instead, this person will deal with risks in a methodical, objective, and unique way. Often using tools such as Earned Value Management, Schedule Analysis, and Decision Trees as a way of making an informed decision. This is the preferred risk attitude.

Risk Tolerant – Will often ignore risks until they become a larger issue. Very comfortable in dealing with risks but tend to downplay the importance of risk management throughout the lifecycle of a project, which leads to headaches when dealing with larger issues that were previously ignored.

When conducting a risk culture analysis, it is important to remember that the risk mentality of the group can often differ from that of the individuals.  Risk culture should be managed and assessed throughout the lifecycle of the project to ensure that proper risk attitude and culture is leading to the successful completion of project objectives.

To learn more about the Evans’ human-centered approach to portfolio risk management, visit us at EvansIncorporated.com and be sure to fill out our contact form to learn more about our services.

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