Risk-Based Thinking: Critical Factor for Project Success

Risk is not a straightforward concept. Definitions of risk vary within every project. Therefore, organizations and project leaders use various performance planning methods to optimize resources and achieve high levels of work productivity. The effect of uncertainty on the achievement of objectives can be addressed by risk-based thinking. In this article at PM World 360, Mustafa Hafizoglu explains how risk-based thinking reduces deviation from planned results.

What is Risk-Based Thinking

Risk-based thinking is a mindset to proactively improve the certainty of achieving project success while utilizing the methods that consider opportunities and threats. Business leaders must apply this approach to identify, investigate, and modify risks during the decision-making process. This method helps in preventing losses, capture opportunities, and improves communication throughout the enterprise.

Critical Success Factor

Obtain Support, Commitment, and Resources

Obtaining support from executive management is the primary criterion for success. On the other hand, senior executives must understand that risk-based thinking enables organizations to determine the factor that could negatively impact operations, management, processes, and projects. Project leaders must obtain executive support, commitment, and resources to put preventive controls to minimize adverse effects and make maximum use of opportunities as they arise.

Focus On Business Model Alignment

Whether you are implementing tactical or limited risk assessments or aligning them with enterprise risk management initiatives, the management must understand its strategic benefits.

Develop a Realistic Plan

The risk-based plan must support the business case. The plan can be a work breakdown roadmap with concrete steps for achieving your project’s success.

As risk-based thinking has emerged and spread throughout the organization, this mindset has strongly supported risk management in projects. “Risk-based thinking has also triggered an opportunistic perspective in employees,” explains Mustafa. It is impossible to get rid of the uncertainty. Risk-based thinking will undoubtedly boost your performance in this increasingly complex environment. To read the original article, click on https://www.pmworld360.com/blog/2021/01/05/using-risk-based-thinking-to-reduce-deviation-from-planned-results/.

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