Interesting article on Risk Management that was published PMHut.com. Note that article has been removed from PMHut since the publication of this article. You can read more from Cora Systems on their blog.
What is the key tip that I like the most? Monitor risk as its rating can change during the life of the project. Too often, risk management is done as a static exercise at the beginning of the project.
8 Top Tips to Consider When Managing Risks in Your Projects
By Cora Systems
In a project, a risk is defined as an event that may or may not occur that could bring with it an element of negativity or positivity to a project. Therefore it is an essential duty when it comes to project management.
Managing risks is a must do when dealing with projects; however, it tends to have a negative stigma attached to it. Risk management does not have to be a long and complicated process for a project manager. The benefits of risk management will outweigh the effort put into it.
All projects bring with them a definite level of risk and uncertainty and therefore going forth with a project without carrying out a risk analysis could ultimately cause huge complications for the project. Logically it’s a choice of putting the time and effort into dealing with the risks and having a procedure in place to deal with the consequences before they hit or come up with a plan only when a problem arises.
So how do you deal with a project risk effectively?
- Early bird catches the worm: Identify possible risks in your project early. Be open-minded and look at all the possibilities that could happen while the project is in motion. Schedule a meeting and get all the people involved in the project together in a room where a brainstorming session can take place to identify all possible risks that could occur during a project.
Assess the risk: Once the risks are identified the next step in the process is to assess the risk. This can be examined by calculating the possibility of the risk happening versus the impact that the risk will have if it does occur, e.g. if the impact is low and the possibility is high then the risk will be labeled as a medium risk. This will help in the prioritization of the risks and of your time around the risks. It would be advisable for the higher impact risks to get priority over the lower impact risks. This stage of risk management should not be rushed and should be allocated an adequate amount of time.
Communication: Communication is very important in the management of risk. Clear lines of communication regarding the risk should be drawn up to ensure that all individuals involved in the project are well informed of the on-going status of the project risk. A good way of ensuring there are minimal communication barriers is to assign a section of the project status meetings to project risks. This gives the project manager the opportunity to gather feedback and any other details that need action.
Make a plan: Now comes the tricky element. All the effort so far will be wasted unless you get this part right. A plan needs to be put in place to deal with these risks. A clear and concise response to the risk will protect the project against possible implications. You have three options:
Accept: Accept that the risk is present and make no plans to rectify it. This would only tend to happen if the risk was small and would have minimal implications on the project if it was to take place, however this approach is not advisable.
Avoid: You organize all elements of your project to ensure that the risk does not take place. May need to look into change management if this approach is taken.
Minimise: This is the most realistic option out of the three. This is where you manipulate what is causing the risk in an attempt to reduce or ideally eliminate the impact of the risk on the project.
Sharing is caring: As a project manager you need to be able to hand over responsibility of certain aspects of a project. By passing on the task of managing a risk to a member of the project team who is best qualified to deal with the risk, the project manager can concentrate on deeper tasks within the project. The nominated individual will then become the risk owner and from there have the power to mitigate the risk. This action should not be underestimated, due to the fact that if someone is not given ownership there is a chance that the risk won’t be mitigated.
Changes in your risk status: Risks can change during a project without much warning and therefore it is extremely important to review your ongoing risks regularly. What was once a high possibility/ high impact risk could now be insignificant and of course this could happen the other way around also. It is of great importance that these risks are kept on top of.
Strict control and management: Keep an updated account of your risks to give you full control and management of them. By doing this you can view the progress of all risks in real time. This will also come in useful during project status meetings. Details of the risk along with the individual who owns the risk should all be included in this. Control of the risk and precise monitoring will help ensure that any knock on effects from the risks are highlighted and managed in time.
Past risk management scenarios: Make life easy and look back on how you managed risk in past projects. Examine what worked and didn’t work in a hope of developing a stronger mitigation strategy for the future.
Risk management should not be discussed with apprehension within an organization when it involves projects. Once completed and managed successfully it will ensure that all risks are understood, agreed and controlled by the project team allowing minimal affects to the implementation of the projects.