subject: Project Risk Management - - Assessing Risks - Why the Buck Stops With You [print this page] Project Risk Management - - Assessing Risks - Why the Buck Stops With You
What should we tend to make of the Bernard Madoff scandal? The very plan that for many years one in all the most visible pillars of the American investment community had been, in impact, running a big scam is hard to believe. Even tougher to believe is the very fact that thus many investors were duped. The whole quantity lost was initial reported at $50Bn, however this variety could rise as additional and a lot of institutional investors admit having lost cash to Madoff's scam. Hardest of all to believe though is that US regulators allowed Madoff to urge away with it for so long. A failure of due diligence and regulation The collapse of Madoff's investment funds has revealed: ? That individual investors failed to carry out due diligence checks, either as a result of they place their trust in their brokers and advisers, or else as a result of they merely did not care thus long as they continued to create money; ? That regulators failed to analyze Madoff even when serious considerations were raised that fraud was taking place. Losses from project failure - abundant larger than Madoff You will be asking yourself what this may probably have to do with the topic of managing project risks? Two things: 1. The amount of cash lost -- $50Bn -- is solely concerning one third of the money lost to project failure in the European Union every single year. 2. No-one seemed to conduct a proper risk assessment before committing huge sums of money (sounding familiar?). Assessing risks: your personal responsibility So what can you learn from this that will help you manage your projects higher? Here are 3 lessons you'll be able to remove from this awful tale: 1. Become a disbeliever. When one thing looks too sensible to be true it's as a result of it is not true. This piece of recommendation applies as abundant to investments that promise ten% or a lot of each year, regardless of what, as it does to project reports that forecast no problems. 2. You are personally accountable for assessing risks. This can be one thing that you cannot overlook, skimp on or leave to others to do for you. Remember, the buck stops with you. 3. Do not take risks that you do not understand. This might seem drastic, but it makes sense. Better to remain off from comes if you are not equipped to manage them. Conclusion But bad the Madoff collapse appearance right currently, it represents a small amount of the cash lost every year to failing projects. The subsequent time you are asked to take on a project, keep in mind that it is a high risk venture. Take personal responsibility for assessing risks. If you do that you may increase your probabilities of success and acquire a positive come on your investment.
