Liability Issues for TRIO Programs Managing Your Project’s Risk

RISK MANAGEMENT CONCEPTS Risk is inherent in all project services and activities. Risk can be managed. All are responsible for Risk Management.

Goals of Risk Management The fundamental goal of risk management is to enhance project effectiveness at all levels, while preserving assets and safeguarding health and welfare. Additionally, the risk management process can identify and exploit opportunities that provide the greatest return on our investment of time, dollars, and personnel.

Risk Management Goals Conserve Personnel & Resources Max Capability Prevent or Mitigate Loss Advance or Optimize Gain Evaluate and Minimize Risk Evaluate and Maximize Gain Identify, Control and Document Hazards Identify, Control and Document Opportunities

Participants will: Adopt Risk Management as part of project philosophy and integrate Risk Management into project planning at all levels. Develop a systematic approach to risk management that allows for more consistency in the decision-making process. Session Goals

Key Concepts of Risk Management. Risk Management Principles. Six-Step Risk Management Process. Levels of Risk Management. Implementation Exercise. Session Agenda

Risk Management Principles Accept no unnecessary risk. Make decisions at the appropriate level. Accept the risk when the benefits outweigh the costs. Integrate Risk Management into project management philosophy and planning at all levels.

Risk Management Principles 1. Accept no unnecessary risk. All project activities and daily routines involve risk. You must accept necessary risk to successfully meet your objectives. Unnecessary risk comes without a corresponding return, in terms of real benefits or available opportunities. Risk Management is dedicated to exposing and avoiding unnecessary risks.

Risk management Process

Risk Management Principles 2. Make decisions at the appropriate level. Those accountable for the success or failure of the project or any component must be included in the risk-decision process. This establishes clear accountability. Managers must ensure that subordinates know how much risk they may accept and when they must elevate the decision to a higher level.

Risk Management Principles 3. Accept the risk when the benefits outweigh the costs. Even high-risk endeavors may be undertaken when there is a clear knowledge that the sum of the benefits exceeds the sum of the costs. Risk Management is about controlling risk, not avoiding all risk.

Risk Management Principles 4. Integrate Risk Management into project management philosophy and planning at all levels. Integrating risk management into planning as early as possible provides the decision- maker the greatest opportunity to apply Risk Management principles. Usually, it reduces costs and enhances Risk Management's overall effectiveness too.

Risk Management Process

Figure 2. Six-Step Process of Operational Risk Management

Risk Management Process Step 1: Identify the Hazard A hazard is any real or potential condition that can: impair project effectiveness; cause injury, illness, or death to personnel/clients; or cause damage to or loss of equipment or property.

Risk Management Process Step 2: Assess the Risk Quantify and qualify the probability and severity of loss from exposure to the hazard.

Risk Management Process Step 3: Analyze Risk Management Measures Investigate a variety of actions which will either reduce or eliminate the risk. Transfer? Control? Eliminate?

Risk management Process Minimize risk through transfers Risk and insurance programs Campers Accident insurance Personal responsibility of participants

Insurance Isn’t “The Solution” Coverage is limited Some losses (i.e., fatal injury) are “unthinkable” or “unacceptable”

Risk management Process Minimize risk through controls Training Policies and procedures Emergency response plans

Controls prevent or mitigate loss Training is a form of control Know how to get help Policies and procedures are forms of loss control Reporting incidents of violent or threatening behavior Drug and alcohol controls Behavioral expectations (student handbook) Vehicle usage policy Risk management Process

Control participants Control the environment Raising awareness before a loss Positive aspects of activity Safety and security

Risk management Process Eliminate risk Risk Management is about controlling risk, not avoiding all risk. Eliminating risk can result in eliminating benefits.

Risk Management Process Step 4: Make Risk Management Decisions The appropriate decision maker uses cost versus benefit analysis to choose the best control or controls. Maximizing opportunity=Good things happen Minimizing risk=Bad things don’t

Risk Management Process Step 5: Implement Risk Management Measures Plan the implementation of measures and the commitment of resources to: Minimize risk Respond to a loss Example: vehicle usage policy

Risk Management Process ACT Get insurance Contract templates Communicate controls Prepare for loss Respond to loss Manage emergencies

Risk Management Process Step 6: Supervise and Review Proactive and personal follow-up on effectiveness of measures.  What worked?  What didn’t work?  Change to improve