Oftentimes, project teams tend to identify, categorise, analyze and strategize
risk based on their perspectives and assumptions when faced with uncertainty.
This is where the problem lies. Since their visibility is bounded within the
confines of their combined experience, assumptions made often do not hold. A
concerted and conscious attempt to recognize and validate assumptions is
required when risks are being identified, analyzed and risk response plans
strategized. This is not usually done.

Managing risks and stakeholder expectations go hand in hand. In this regard,
stakeholder management is crucial. Stakeholders are people who affect or are
affected by a project. They usually are affected by the outcome of the project or
the way it is being managed.

As they will be affected by the project, they will naturally be concerned about
the project. They see the project from their perspective and as such can
recognize impending risks that may not be identified by the project team. By
incorporating their views, the project team will be able to acquire a
multidimensional perspective of the risks that surround a project.

By engaging with key stakeholders, assumptions made by the project team may
be validated. This will prevent the possibility of relying on assumptions that do
not hold when the project takes off. By incorporating the perspectives of
stakeholders on risks faced by a project when developing a risk response
strategy, a deeper understanding of the risks involved and a better formulated
risk response strategy emerges.

A practical starting point would be to ask the following questions that relate to
any new project:

• What is that we don’t know?
• Who are the stakeholders that really matter?
• What are risks they see from their standpoint?
• How can we incorporate these risks into our risk response strategy?

By doing this, the project team will be able to engage with key stakeholders to
establish different risk scenarios from the perspective of all relevant
stakeholders. The level of engagement can vary anywhere from collecting
information from stakeholders, informing stakeholders of the risks, involving
them in developing risk profiles, to even consulting with them on what to do to
deal with the risks identified. The decision on the extent of engagement will
depend on the extent to which the stakeholders have involvement, interest as
well as influence on the project.

Interactive discussions with key stakeholders would curtail the possibility that
the outcome of these strategies could affect them negatively in the long run.
Jointly agreeing on risk response strategies brings about better ownership of the
outcomes by both the project team and the key stakeholders alike.

Engaging stakeholders also help in determining the severity of risks, the
likelihood of these risks, and their impact level. This in turn will enable a more
accurate assessment of the risk to emerge as opposed to when done purely by
the project team.

What really matters is that, when risk strategies are formulated, they are
realistic, accurately describe what pitfalls lie ahead, and more importantly,
establish the readiness of all stakeholders in dealing with risks. When this is
done, the process of developing a risk response strategy is less tedious, less time
consuming and more effective.