Re-evaluate organizational risks

No company is immune to risk, whether it may be operational, financial, or strategic. However, risk is not necessarily a negative trait if managed well. Proper management of risk can result in mitigation of damage and even opportunities for growth. As such, the regular re-evaluation of organizational risks becomes a critical piece of effective management. This is particularly important for project managers aiming to earn their Project Management Institute Risk Management Professional (PMI-RMP) certification, as this responsibility falls largely within their domain.

I. Understanding Organizational Risks

An organizational risk is an uncertain event or set of events that might affect the achievement of a project or organization’s objectives. They can come in various forms. For example, operational risks might include faulty equipment or system failure. Financial risks could involve budget cuts, changes in the market, or fluctuating currencies. Strategic risks may include decisions like changing business directions or adopting new technology.

The impact of these risks extends beyond the immediate project. As such, it is essential for project managers to have an in-depth understanding of potential risks in order to plan and prepare effectively.

II. The Importance of Re-Evaluating Organizational Risks

Regardless of the type of risk, re-evaluating it plays a critical role in the project lifecycle. It’s not enough to identify and assess risks at the beginning of a project. Indeed, risks evolve over time due to changes in the internal and external environment. Thus, regular re-evaluation is necessary to ensure that risk management strategies are still valid and effective.

Re-evaluating risks also allows project managers to identify new risks that may have emerged as the project progressed. It provides a platform to reassess the priorities and decide which risks require immediate attention.

Fundamentally, re-evaluation of risks provides organizations with an opportunity to better understand the risk landscape, make informed decisions, and drive project success.

III. How to Re-Evaluate Organizational Risks

The process of re-evaluating organizational risk involves several steps:

• Risk Identification: An initial list of potential risks is crucial for a comprehensive risk evaluation. Identifying risks can be done through various methods such as brainstorming, SWOT analysis, and expert judgment.
• Risk Assessment: This step involves analyzing risks based on their probability and impact. Tools like the probability and impact matrix help in this process. This step also includes risk prioritization to focus on high priority risks.
• Risk Response Planning: Once the risks are analyzed and prioritized, it’s time to develop risk response plans. These plans detail how each identified risk will be addressed.
• Risk Review and Monitoring: Here’s where the re-evaluation part comes into play. With regular monitoring, project managers can check if the planned risk responses are effective and if there are new risks that need to be addressed.

IV. Real-World Example

Take, for example, a technology company launching a new product. Initially, the company identifies risks such as product failure, lack of customer adoption, and competition. As the project progresses, however, new risks may emerge – perhaps there are unforeseen supply chain delays, or consumer trend shifts. Regular risk re-evaluation allows the company to reconcile those new risks and adjust strategies accordingly.

V. Conclusion

As PMI-RMP candidates, re-evaluating organizational risks is a significant task that provides an opportunity to learn, adapt, and align with the changing risk environment. By doing so, you not only safeguard your projects but also improve their chances of success. Remember, risk management is not a one-time effort; it’s an ongoing process. Regular re-evaluation is the only way to ensure that your risk responses are as dynamic as the risks themselves.