How to Manage Your Project Risks?

How to Manage Your Project Risks

A risk is something that might affect the success of your project. Like, if you're going out - you'd consider the risk of it raining today. You'd be sure to pack an umbrella if you thought the risk was high!

You'll find risks on your project too, and the difficult thing is that you never know exactly if and how they will affect you. The best you can do is plan to mitigate the risk (like packing your umbrella) or work out how you can stop it happening in the first place.

Here is a simple 5 step process that you can use to effectively manage risks on your project.

Step 1: Identify risks
First, you need to know what could affect the success of your project. List everything that you are aware of that could be a potential problem. You can group risks into categories like Financial, Operational, Planning and so on if that helps.

Step 2: Assess risks
Once you have your list of risks, you can work out what sort of impact they will have on the project if they happen. Some won't present much of a problem at all. Others will be a significant issue. If you have limited time and money to address them all, prioritize the most important ones.

As well as looking at each individual risk, use a report or dashboard to show you the overall risk profile for your project—that is, whether your project has a high, medium or low level of risk overall when all the risks are taken into account.

Step 3: Plan some actions
Now you know the most important risks, you can work out what you need to do to address them. These are your mitigating actions, or the steps you should take to either stop the risk from happening or make it have less of an impact if it does. Delegate the tasks to your team using Risk Management Software, which easily allows you to assign work to your colleagues.

Step 4: Carry out your plan
As all your actions are stored in your project management software, you can easily track who is responsible for what and how much progress they have made. Check that each team member is on target to finish their risk mitigation activities before you think the risk might happen!

Step 5: Review risks
It's not enough to carry out all these steps as a one-off exercise. You have to periodically review your risk log and check that there are no new risks. Equally, there may be some on your list that you can remove as perhaps the danger has passed or they did materialize and you dealt with them as part of the project.

Schedule a task on your project plan to regularly review your risk log with the team. You can use this time to check any outstanding actions and to make sure that everyone knows what the priority risks are. Then you can collectively focus your efforts on making sure that they don't occur—or if they do, that the impact they have will be small enough to manage easily.