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Stakeholders and Risk

 

SERIES ARTICLE

Series on Effective Stakeholder Engagement

By Lynda Bourne, PhD

Melbourne, Australia

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Managing risks is important because it focuses attention on the uncertainties that matter. The international risk standard ISO31000:2009 Risk Management – Principles and Guidelines says risk is the ‘effect of uncertainty on objectives’, and the Project Management Institute Practice Standard for Project Risk Management defines risk as an ‘uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objectives.’ These definitions implicitly contain three elements:

  • An uncertain event or condition (situation) that may occur in the future;
  • The likelihood of occurrence of the situation; and
  • The effect (positive or negative) that the occurrence would have on one or more of the project’s (or program’s) objectives.

Consequently, for every project objective there will be various risks of different types that may affect it, all of which require managing.

Stakeholders interact with risk management in three distinct ways:

  1. A significant proportion of project (or program) risks are directly caused by the action or inaction of stakeholders, in some circumstances this may be in excess of 90% of the identified risks.
  2. The perception of what is an acceptable or unacceptable risk is intrinsic to individual stakeholders and their attitudes – some people seek and enjoy risks (eg, skydivers), others are risk averse.
  3. The identification, assessment and management of risk depends on the decisions and actions of stakeholders.

All of these factors affect the perception of project success and again these perceptions are formed and held by stakeholders based on their personal experiences of the project and its outcomes.

In short, successful risk management requires effective stakeholder management and the stakeholder’s perceptions of project success or failure is intrinsically linked to effective risk management.

More…

To read entire article (click here)

Editor’s note: This series of articles on effective project stakeholder engagement is by Lynda Bourne, PhD, Managing Director of Stakeholder Pty Ltd (Australia) and author of the books Stakeholder Relationship Management and Advising Upwards, both published by Gower (UK). Dr. Bourne is one of the world’s leading authorities on program/project stakeholder relations. See her author profile below.

 


 

About the Author

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Dr. Lynda Bourne

Melbourne, Australia

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Dr. Lynda Bourne
is Managing Director of Stakeholder Management Pty Ltd – an Australian based company with partners in South America and Europe. Through this global network she works with organisations to manage change through managing the relationships essential for successful delivery of organisational outcomes.   Lynda was the first graduate of the RMIT University, Doctor of Project Management course, where her research was focused on tools and techniques for more effective stakeholder engagement. She has been recognized in the field of project management through her work on development of project and program management standards. She was also included in PMI’s list of 50 most influential women in PM.

She is a Fellow of the Australian Institute of Management (AIM) and a Fellow of the Australian Computer Society (ACS). She is a recognized international speaker and seminar leader on the topic of stakeholder management, the Stakeholder Circle® visualization tool, and building credibility and reputation for more effective communication.   She has extensive experience as a Senior Project Manager and Project Director specializing in delivery of information technology and other business-related projects within the telecommunications sector, working as a Senior IT Project Management Consultant with various telecommunications companies in Australia and South East Asia (primarily in Malaysia) including senior roles with Optus and Telstra.

Dr Bourne’s publications include: Stakeholder Relationship Management, now in 2nd edition, published in 2009, Advising Upwards published in 2011, and Making Projects Work, published in 2015. She has also contributed to books on stakeholder engagement, and has published papers in many academic and professional journals and is blogger for PMI’s Voices on Project Management.

Dr. Bourne can be contacted at [email protected].

To see more works by Lynda Bourne, visit her author showcase in the PM World Library at http://pmworldlibrary.net/authors/dr-lynda-bourne/