Without a doubt, project delivery has been deeply challenged as the pandemic caused widespread disruption and forced many business leaders to accelerate programs and technology projects to pivot to new ways of work. Nearly three years on, how has that played out in project delivery and has it shifted the leadership view on managing risk?
In the early days of the pandemic, many organisations responded to sudden and unexpected changes to their workforces, operations, and performance by accelerating the timelines of planned digital transformation programs and technical rollouts to mitigate interruptions to how their teams could continue to work and engage with customers.
Some of the efforts were herculean as IT and project teams zeroed in on prioritising those projects and technology platforms that ensured a newly dispersed and locked down workforce and customer base could adapt as quickly as possible to new pressures on demand or supply.
It’s been said that the response to the pandemic was ‘digital’ and the scale and speed of transformation based on data-driven projects is evident in how quickly online business has become a more normal part of customer engagement.
However, as the ripple effects of the pandemic and other global disruptions have continued and digital transformations are settling in, business leaders have had to address a broad range of risks to their ability to weather not only the disruption, but how to continue to grow and navigate the changes in the behaviour and engagement of their workforces and customers.
As the pandemic looks to be abating (though not yet over), as project practitioners, we wondered: what happened with those accelerated projects? Were they successful or did they fail? Has the response to ‘digitise’ in response to COVID and other global uncertainties yielded the benefits or introduced new risks that there was not time to properly recognise?
And one of the more interesting conversations is whether attitudes to risk in projects have shifted?
Hindsight is 20/20; can risk management help us get in front of disruption?
In a world where there is considerable disruption, business leaders are recognising that relying on the learnings gained in hindsight is not necessarily a good indicator of the risks that lie ahead. Instead, building proactive risk management into projects and building organisational resilience can enable them to anticipate where their business may be vulnerable and adapt to ever-shifting dynamics.
Taking a defensive approach and using risk management techniques to foresee disruption takes data; and similar to Business Continuity Planning, in which an organisation prepares and plans responses for disasters or loss of assets or capability it hopes never to experience. Data and risk management techniques can be used to identify emerging trends in markets and business operations that can trigger a mitigative or risk impact-reducing response that will help weather the potential storm.
This is a key nexus between operational risk management and the response that often becomes a project delivery or broader transformation, and just like the operational example above, those organisations that recognise that they need to adapt are looking at more dynamic and adaptive risk management within transformation and technical project delivery to navigate an unpredictable present and fast-changing future. In short, risk management is a key ‘muscle’ in developing the resilience organisations need to flex as uncertainty prevails.
Of course, some things remain the same. Risk management should not be reactive but instead be an integral part of the project planning process to determine what risk may occur across the timeline, and how to control that potential risk.
Refocusing on project fundamentals
Likewise, as a baseline, organisations can avoid underperformance in projects by setting up a well-designed and intelligent project control environment, aided by behaviour and culture.
By applying management and technical processes and measures to projects and programmes, organisations can identify the challenges early, and then manage and mitigate them. Conversely, organisations that don’t take project controls seriously and have inadequate tools and processes to keep them on track will see even straightforward projects struggle to deliver.
Hence, it is critical that organisations develop a culture that makes governance and adherence to project controls a priority enterprise-wide, and not the business of a single function.
But this only gets organisations some way.
Managing risk amid disruption
Instead of looking for scapegoats, stakeholders can use today’s changeable conditions as an opportunity to innovate and lead on risks that have emerged in the pandemic.
Among these is increasing awareness, borne out of the pandemic, of risks posed by external versus internal factors — organisations must now look more outward as well as inward when reviewing project delivery risk.
Organisations, when needing an urgent response to disruption, will require projects to deliver faster. How that is most commonly manifested is by the project taking on more risk. This happens when less time and effort is spent in planning and analysis, designs are produced quicker with some corners cut or checkpoints skipped or sponsors rush teams forward to the ‘build phase’ as fast as possible. All of this is understandable under duress but comes at a cost of increased delivery risk and the likelihood of mistakes, issues, re-work and then delays. When there is a need for an aggressive push, there is also a need for more risk profiling and mitigation.
To combat today’s disruptive environment, experts suggest a dynamic risk management framework with three keys: detection of potential new risks and weaknesses in controls, determination of risk appetite, and deciding on an appropriate risk-management approach.
Drilling down, organisations need both to predict new threats and to detect changes in existing threats, making it critical to anticipate, assess, and observe risk based on a variety of external and internal data points.
To help do this, organisations must answer questions like how will risk play out over the long term, are we ready to respond to systemic risks, and what new risks loom ahead? These principles, if used as key guides on risk, can be leveraged to counteract threats, and even turn them to a firm’s competitive advantage.
Leveraging the right information
As dynamic risk management grows ever more critical, organisations can take a number of active steps to mitigate threats to current and future projects.
On this front, organisations are advised to prioritise a reset in the aspiration for risk management, set up agile risk-management practices, leverage the power of data and analytics, invest in future risk talent, and bolster risk culture.
Taking these steps, organisations will start to be well placed to dynamically navigate risk management in uncertain times, transforming downside risk into a competitive edge.
To find out more about how Quay Consulting can support project risk management in your organisation, please contact us.
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