Effective Project Management

Section M Risk and Risk List

No government should ever imagine that it can always adopt a safe course; rather it should regard all possible courses of action as risky. This is the way things are: whenever one tries to escape one danger one runs into another. Prudence consists in being able to assess the nature of a particular threat and in accepting the lesser evil.

Machiavelli, Niccolo, Translated by Bull, G., ‘The Prince’, Penguin Books, 1961, p. 123.

The above quotation is a seminal statement about risk. It says that: risk does not go away. You may have put your finger on it to restrain it, but it pops up somewhere else in a different shape. This is the essence of contract strategy. How does one mould and shape the project circumstances in order to make the risks acceptable to someone else?

The project management model (see Part I, Section B Project Management Characteristics, figure I.B.1) can also be used as a risk management model. It starts with the objectives to determine which aspect will dominate the decision‐making process. Risk is uncertainty that will affect the outcome of these objectives.

Next, the means to help us ensure total scope definition are the product and work breakdown structures (P&WBS – see Part IV, Section F Scope). In developing the P&WBS, it not only helps us understand and define the scope but it also identifies our areas of ignorance – the identification of a major risk in itself. The P&WBS process thus becomes our tool for total risk identification ...