Thoughts of a project manager about "Risk Management for Businesses and Projects: Why it is an Art? "
Foremost, businesses must navigate a complex web of external and internal factors to achieve the desired results. These factors often include political, economic, social, technology, environment, and legal aspects. In the business and project management domains, these factors are commonly referred to as PESTEL, which is part of the analysis stage. Often, they are viewed as external factors. However, I tend to differ in this thinking. In recognizing the internal factors of a business or a project, the use of PESTEL in analyzing also applies.
A good example is the political dimension. Businesses and projects alike constitute different stakeholders, with each having different interests. They also have different interpretations of how those objectives could be attained due to inherent cognitive biases. Hence, in any project, the use of Stakeholder Analysis and the development of the Stakeholder Engagement Plan, side by side with the PESTEL Framework, are essential. We, humans, are a complex animal to navigate that each of us has different intentions and motivations. We tend not to support or engage if our interests are not taken into consideration. Another complication is the behavior aspect that can be couched in the social element. Not all humans are receptive to change, as we all know. Some, if not most, prefer the status quo for varied reasons (e.g. traditions, no interest in learning new things, loss of control).
The use of risk management in the pursuit of business or project objectives, thus, cannot be understated. Thankfully, there is plenty of literature, guidance, and standards to use. Notable, among those, is the ISO31000 – Risk Management. However, one has to be careful in adopting a rigid risk management framework. Like living, risk management is also an art.