Even the most well-crafted projects entail a certain degree of risk. Because project risk is inevitable, project managers should do everything within their power to anticipate and mitigate events that could potentially derail progress. Risk awareness should be integrated into the framework of your project to protect success and avoid jeopardy. Part of the risk management process involves designating a risk owner for tasks throughout your team.
Imagine a scenario where, as project manager, you’re responsible for overseeing a 2-year project. During your yearly holiday, you get a call from a project team member — something has happened that poses a serious risk to the project. You calmly tell them, “It’s fine.” You hang up, call the designated risk owners, and they inform you that everything is under control — they’re executing the risk response plan that was put in place at the beginning of the project. You hang up the phone, worry-free, and continue to enjoy the splendid sunshine and dry martinis with a sea view.
The reason this was possible was that there was a clear risk management framework in place from the get-go. In the beginning, risk management identified risk factors and put response plans in place to minimize interruption halfway through.To put it in the wise words of Gary Cohn, American business leader and former Director of the National Economic Council, “If you don’t invest in risk management, it doesn’t matter what business you’re in, it’s a risky business.”
This article covers what a project risk owner is, what they’re responsible for, and how they increase the chances of project success. First, let’s walk through exactly what a risk owner is.
Who is a risk owner in a project?
In project management, the risk owner is the person responsible for identifying, managing, monitoring, and mitigating risks within a project. While the role of risk owner varies depending on project size and scope, they’re typically responsible for identifying potential risks, developing risk management plans, and monitoring the project for changes and potential threats. While the role of the risk owner is critical to the success of any project, it’s especially important in large, complex projects. In these cases, stakes are often higher, and the margin for error is low. By taking proactive measures to identify and manage risks, the risk owner helps ensure that a project stays on track and meets its objectives.
Since the risk owner holds the ultimate responsibility for managing project risk, it’s important to assign someone who is highly competent and up to the challenge. If anything goes wrong, they hold the final accountability. Now, let’s zoom in a little and go into more detail about the responsibilities of a risk owner.
“Risk owner” is a part of our Project Management Glossary — check out the full list of terms and definitions!
What is a risk owner responsible for?
By taking ownership, the risk owner can help prevent risks from becoming actual problems. In addition, it’s also the risk owner’s responsibility to:
- Identify, assess, monitor, and manage risks and potential risks
- Clearly articulate risks in risks statements for stakeholders
- Determine the appropriate level of risk tolerance
- Assign stakeholders to sub-risks within an enterprise where appropriate to do so
- Integrate risk management into overall project operation
- Create and execute risk response
- Be vigilant for potential risks from internal and external sources before and during project execution
Risk owner vs. project manager
There are a few key ways in which risk ownership and project management differ. One of the most important ways is in terms of responsibility.
A risk owner is typically responsible for identifying, analyzing, and mitigating risks within a project. In contrast, the project manager is responsible for overall project success.
This means that the project manager must take into account all risks when making decisions about the project, but the risk owner is specifically responsible for managing risk.
Another key difference is in terms of authority. A risk owner typically has the authority to make decisions about how to best manage risks within a project. This is because they are closer to the source of the risk and have a better understanding of its potential impact. By contrast, the project manager typically has more general authority over the project as a whole. This means that the risk owner may need to work closely with the project manager to ensure that risks are being appropriately managed. Finally, there may also be some differences in terms of skills and knowledge. A risk owner often needs to have a deep understanding of risk management principles and tools.
In contrast, a project manager needs to have a more general understanding of all aspects of project management. A risk owner may need to have specific technical knowledge related to the risks involved in a particular project, while a project manager does not necessarily need this same level of expertise. Ultimately, both risk owners and project managers play vital roles in ensuring the successful completion of a project and should work closely together.
How risk owners improve project success rates
Risk is often thought of as a negative force, something to avoid at all costs. But in the world of project management, risk can actually be a positive force. By identifying and owning risks, project managers can improve the chances of project success. When a risk has been identified, the risk owner can develop a plan to mitigate or avoid the risk entirely. This allows for proactive rather than reactive decision-making. This can make all the difference in the success of a project. By taking responsibility for risks, risk owners build trust with their team members and stakeholders. As such, risk ownership can be an important tool in achieving project success. Moreover, by strategically managing risk and putting risk response measures in place, risk owners develop valuable skills. The ability to effectively control risk is an asset worth having for any business.
Benefits of appointing a risk owner prior to the start of a project
Allocating risk owners to projects has a number of benefits. While some of the advantages may not be noticeable unless faced with a risk event, having the ability to quickly respond to and recover from threats is paramount for ensuring project success. Here’s how it’s beneficial:
- Peace of mind: Knowing that risks have been evaluated and a response plan has already been put in place gives managers and stakeholders peace of mind when moving forward with a project. This way, the team can focus on driving success with fewer worries about potential setbacks.
- Fewer disruptions meeting project objectives: Even the most carefully planned projects come with surprises. But by assigning a risk owner, your project will be subject to fewer mishaps and disruptions, allowing you to reach objectives more effectively.
- More confidence from stakeholders: When stakeholders know that you’ve put the background work in and preemptively planned for risk events, they’ll feel more confident about engaging in projects with you.
Top monday.com features for mitigating risk
Risk management is an essential part of any project, and monday.com offers a variety of helpful features for mitigating risk. One of the most useful tools is the Risk Register Template. This template allows users to track and manage risks throughout the project lifecycle, from identification to mitigation. It includes fields for risk description, probability, impact, and mitigation actions. This information can then be used to prioritize risks and develop response plans. In addition, our features allow you to monitor risks throughout the project lifecycle and ensure that they are being appropriately managed. By using monday.com for risk management, you can ensure that your projects are well-protected against potential threats.
Frequently asked questions
Who is the risk owner in a project?
A risk owner is a project manager who is responsible for identifying, assessing, and mitigating risks within a project. Because risks can have a significant impact on the outcome of a project, it’s important for risk owners to have a clear understanding of the potential consequences of each risk.
When should project managers engage in risk management?
Risk management is important for any type of project, as there’s always some risk involved. However, the larger the project and the more resources that have been allocated to it, the more important risk management is. It’s particularly important to anticipate potential risks on large projects that have many moving parts.
Risk ownership in project management
The term risk owner refers to the individual responsible for identifying, assessing, and mitigating risks. While risk management is a team effort, the risk owner plays a vital role in ensuring that potential threats are identified and addressed in a timely manner. By taking ownership and full accountability for risks, they help prevent risk factors from becoming actual problems. monday.com has an array of useful features to assist with risk management activities. From our Risk Register Template to the ability to assign specific tasks to people, your project dashboard will offer full transparency, helping to keep the risk owner and project team on track for success.