Which company is more successful: one that conducts 100 risky projects or one that has 100 low-risk projects? Risky projects normally have a much greater profit- and loss potential. The motto is: Exploit the profit potential and reduce the loss potential. If senior management has the courage to take risks but can also say NO in an early project stage and cancels projects with a high risk or minor probability of success, then the profit potential is accordingly high.
Gartner Group estimates that with an established project risk management, depending on industry, approximately 20% of the projects are canceled after the planning-/concept phase, before the big money is spent in the execution phase. If 70 of the 100 high-risk projects survive after the planning/concept phase and continue to be subject to consistent risk management, then success isn’t far away.
Risk has a direct relation to profit. Simply put: the more risks a company is willing to take with its projects, the higher the possible benefits can be – but only if you have the risks under control with consistently applied risk management on a project and company level. Whoever doesn’t take any risks, will definitely stagnate!
A Matter of Conviction
Do you know what you will face if you don’t properly deal with your project risks? Often, you’re lucky and it doesn’t happen much. However, the hammer will eventually strike and you will be confronted with problems and disasters, which you were afraid to imagine in your thoughts. Is it a problem for you…- … if the project takes much longer?
- … if the project costs much more?
- … if the project doesn’t achieve the required performance?
- … if customer satisfaction massively drops?
- … if the reputation of your company is ruined?
- … if you don’t have a job anymore?
This April, the Second Edition of my successful book „Project Risk Management: The Most Important Methods and Tools for Successful Projects“ was published as print and e-book.
Get a free PDF copy and write a short Amazon.com review about the book. This way you support my effort. Please contact me.