Project Management Risk – Success

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Risk management is at the heart of every successful project. Why? By identifying the things that can cause our projects problems, such as, delays and additional costs, we can prepare plans to deal with these potential threats or to help reduce the likelihood of them happening at all, to save time and money, both of which are close to the heart of our customers.

Why manage risks?

Risks exist for every project and if we choose to ignore them, they don’t just go away. Instead, we end up working reactively to try to mitigate the effects when things start to go wrong.  Identifying and managing risks in a controlled way, allows us to work out what the effects will be and allows us to identify the actions we can take to help reduce or eliminate these effects.

When to identify risks?

Very early in the project’s lifecycle, the risks should be identified and considered, but managing risks is a process that must be embedded within any project to ensure success. It is not a one-time activity.  All project staff should understand their responsibilities for identifying project risks.

Risks can be identified in a number of different ways, including:

• Brainstorming: the project team use open-minds to come up with potential risks to the projects. Often one idea will spark another. Not all will be true risks but this is a good starting point and is one of the most widely used methods for identifying project risks, particularly at the beginning of a project.
• Strengths, weaknesses, opportunities, threats (SWOT): analysing each of these can help identify project risks.  Remember, risks aren’t always negative.  A positive risk is known as an opportunity!  Where-as a risk that materialises will cause our project a problem, an opportunity that materialises will bring a positive benefit to the project.
• Review of documentation: the project plan will highlight dependencies between activities and this can be a strong source of risks.  Other project-related documentation, for example, business case & project scope, should also be considered.

Remember, you won’t find all the risks at the outset, and even if you keep looking, there are still likely to be the unexpected ones that creep up on you.  If you done a systematic job at risk management throughout your project, any unexpected ones shouldn’t cause you too much heartache!

What to do with identified risks…

Known risks should be analysed to firstly define their potential impact. You don’t want to spend a whole load of time, effort and money on a risk that turns out won’t really cause too big a problem.  So, you need to have a good idea of the level of threat each risk may cause so it can be dealt with in the right way, and there are 4 ways to handle risks:

• Tolerate: if the impact of the risk is relatively small, you may choose to just live with it.
• Treat: Producing a plan to mitigate the risk is the most common of all methods for handling risks.
• Transfer: in some cases, you can transfer the risk to a third-party, for example, an insurance company.
• Terminate: if there is a high-severity risk that can have catastrophic consequences on the project, it may be appropriate to effectively shut-down the area that is causing the threat and terminate the risk entirely. As an extreme example, in developing online clinical forms for doctors to use to assess patients, the use of non-clinical staff to produce the draft of those forms could pose such a serious clinical risk that the approach may simply be discarded.

Record all risks on a risk register. This can be (and often is) as simple as a spreadsheet – there are plenty of free downloads. Make sure all risks have a clear owner, who is the person responsible for managing that particular risk and that each owner provides regular updates for the risk register.

Who needs to know about risks?

In short, everyone involved! Communication is one of the most important factors in risk management within a project and the risk register should be an integral part of project meetings.

All projects have risks – turn them to your advantage by bringing them out into the open where they can be analysed and dealt with, helping you to ensure the success of your project!