Any discussion of project risks needs to recognise that all projects have risks. The very nature of a project is not "business-as-usual" – projects tend to go beyond the status quo – and that will always pose some measure of risk. It is important is to accept that there will be risks, but also recognise that risks need to be managed in order to minimise them. Projects where risks are actively managed and controlled are more likely to be successful. But how exactly can you handle and reduce project risks as a project manager?
Effective risk management has a number of possible objectives, such as:
- to prevent risks happening, where possible, that pose a threat to delivering a successful project outcome;
- to mitigate risks that cannot be avoided by planning the most appropriate response; and
- to act upon risks that might present positive opportunities. That is, viewing risk from a different perspective – one that does not always assume risks are bad for a project.
Activities designed to reduce project risks are an integral part of project management. One of the biggest hurdles to overcome in terms of risks in project management is identifying the risks in the first place! Sometimes it is impossible to know in advance about certain types of risks. For example, if your project involves cutting-edge innovative technology, then predicting the possible risks is taking a shot in the dark.
Find your next course
But, there are also some risks that are common across many projects or risks that certain team members may be aware of, but don't communicate to project managers or project leaders.
One way to reduce risks is to gather as much information as possible that might help you identify possible risks. This can be done through tried and tested methods such as brain-storming, story-boarding or interviewing individuals from all parts of operations related to a particular project. Working through a structured project plan template will also help you to map out potential risks, as it will encourage you to strategically approach and analyse the project each step of the process.
Once you have documented the identifiable risks, you will be in a much better position to prevent them or mitigate them; and if you manage those well then any unforeseen risks are likely to have a lesser impact on the overall project. There are 4 essential steps to reducing risk: documenting, prioritising, avoiding and mitigating.
Documenting
Document each risk in detail, including their potential impacts and possible responses to mitigate the risk. Then, assign a team member to monitor each risk as your project progresses. Keep this risk log updated throughout the project.
Prioritising
Prioritisation of risks should rely on a combination of how likely the risk is to occur and its effect on the project's schedule or budget. Cleary, certain risks may be very unlikely to occur but could have an extremely serious effect on budget, schedule or even on your ability to complete the project. Others may be very likely to occur but require no more response than dipping into a contingency fund to resolve the issue.
Avoiding
Once compiled, the detailed and prioritised list of all the known risks needs to be communicated to the team members, stakeholders and anyone else involved in the project. By doing, this you will enable your team to work towards avoiding these risks – if a team is not made aware of what could go wrong, how can they work to avoid it?
It is impossible to avoid unknown risks, and more effective to concentrate your efforts on the known risks associated with your project.
Mitigating
Before any potential risks have occurred it will benefit the process to consider what the best solution to the problem would be, should it occur. You can also decide for each individual risk whether to try and implement the solution, if resources allow, or simply accept there is a problem but defer any solution to a later date – possibly after the final product has been delivered – depending on the severity of the problem. If the decision is to resolve the problem then ensure the solution is fully implemented otherwise you will have just wasted your time.
Effectively managing risk, as already mentioned, is part of a project manager's role and helps ensure more successful projects. However, risk management should never be such an onerous task that it takes significant resources away from the other aspects of project management.
Parallel Project Training has contributed this article for Findcourses.co.uk. Parallel Project Training is an accredited training group specialised in Project Management training solutions and a recognised professional adviser to project managers in the United Kingdom.
Find your next course