Project Risk Management: Essential Methods for Project Teams and Decision Makers

CHAPTER TWO

Main Components of a Risk Management System

Questions Addressed in Chapter 2

• What happens when projects do not have risk management plans?
• What happens when projects do not have good risk management plans?
• What are the three (actually four) dimensions of risk management?
• What are the roles of broiler black swans and red herrings in risk management?
• What are the roles of the game changers and show-stoppers in project risk management?
• What roles did Fyodor Dostoyevsky and Dr. Feynman play in risk management?
• When the cart gets put before “two horses” in risk management, how do we put it back?
• How does automation allow you to make mistakes easier and more comfortably?

A PROJECT RISK MANAGEMENT SYSTEM is like a symphony orchestra that includes many instruments and performers. It requires the proper structure and fine tuning and its parts should be well synchronized to ensure proper overall performance and to exclude cacophony. This chapter provides a high-level overview of the components of an adequate project risk management system. Subsequent chapters describe all the required details. A project risk management plan is like a “full score” that is used by a project team to play in unison like an orchestra. This document ensures that the project risk management system adopted by an organization is a differentiator (supposedly a positive one) and a strong competitive ...