The Perception of Risk from Different Stakeholders - How It Can Affect the Process of Risk Identification?

INTRODUCTION

Project Managers are responsible for the initiating, planning, executing, monitoring & controlling and closing of a project. The implementation of a project is often unpredictable; therefore, it is important for Project Managers to plan for unpredictable events that can jeopardize the successful completion of a project. To begin planning for risk, the project team must identify the stakeholders, people or organizations affected by the project, that have different levels of interest and influence on the project (PMI, 2008, p.246). Therefore, in order for Project Managers to identify project risk, he/she must recognize that stakeholders will influence the risk identification process because they may have different perceptions of project risk.

ANALYSIS

There are no guarantees that a project will be successfully completed within the specifications outlined in the project plan. To increase the likelihood of implementing a successful project, the creation of a risk management plan will assist in the unpredictability of a project by outlining potential risk events and a contingency plan for each risk (Kendrick, 2010, p.8). In a perfect Project Management world, the Project Manager would have total control and influence over the implementation of the project. Unfortunately, this is not the case. Project Manager's must be aware that, "the perception of risk for a project is different for a PM, Project Team, client or senior management" (Rife & Dabbah, 2011, p.5). Therefore, in order to effectively define the project risks, influential stakeholders should be included in the process. Key stakeholders can hold different power, interest, influence and impact on a project; therefore, during the risk identification process, it is sensible to include them in the process. In order to identify key stakeholders, the use of a power/interest grid outlined in the PMBOK guide would be useful (p.249). The Power/Interest grid outlines the level of power and interest a specific stakeholder has, and the type of communication level to maintain with the stakeholder. The importance of this grid is to identify the influential stakeholders and what their expectations are.

High Influenced - Manage Closely Stakeholders

Competition, consumer needs, technology and industry changes are a few examples of outside influences that could cause stakeholders to try to influence Project Manager's on what they deem project risks are. The uncertainty of risk is that if you fail to identify the potential risk and its causes, the consequences can impact one or more project objective (Heldman, 2009, p.232). A universal risk in all projects is the schedule. Project Manager’s use their knowledge and experience to determine a feasible schedule to complete a project; however, there are instances