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Project Risk Management for Absolute Beginners

January 20, 2010 | Author: PM Hut | Filed under: Risk Identification, Risk Management, Risk Quantification & Analysis, Risk Response & Control

Project Risk Management for Absolute Beginners
By Carol G.

Risk Management must be one of the most intimidating aspects to project management. What if you miss seeing one? What if you choose the wrong course of action? What if you ignore one that was brought to your attention when you were preoccupied? One false move can be hazardous to your project. It’s no wonder many people would rather gloss over risk management than face it.

Here are some simple suggestions for facing and managing your risks.

There are three main types of risk:

  • External – not directly related to the project but can affect it. These risks will most likely be related to the corporate environment / culture or politics.
  • Internal – have a direct affect on the project but are under your control.
  • Technical – impact the tools you use during the project cycle e.g. software, manufactured parts etc.

I’m sure there are more types of risk and they can be called whatever you want. The main point here is to recognize the source of the risk so you can determine the amount of control you may have over it.

Step 1: Identify/Analyze Risk

  • The first pass is usually best done as a group brainstorming event. Keep the group small to maintain focus.
  • In the first session, you will also communicate the process for reviewing and adding risks.
  • For each risk identified, assign probability and impact values from 1-3 (high, med, low)
  • Identify the top 1/3 of your risks (high probability, high impact for example). These will be your focus items.

Step 2: Respond to the Risks

  • For all risks identified in Step 1, document your analysis (type, probability, impact)
  • Determine your response strategy. Will you mitigate, plan for contingency or defer?
  • Document the triggers for activating your plan and set dates if possible.
  • Assign an owner! Find the person who will be the first to recognize if the risk event is about to occur. This person will be responsible for monitoring the situation and advising the project team of the status.

Step 3: Monitor all Risks

  • Follow the communication and review process set in Step 1.
  • Assess probability / impact for all identified risks regularly as some may increase or decrease in importance as the project progresses.
  • As new risks are identified, follow the steps above to bring them into the process.
  • Your tracking process does not need to be complicated, just be sure to keep your risks visible and up to date.

In short, don’t hide from risks, face them and work with them. Just think, any of the risks you face could present you with your defining moment as a Project Manager – will you be a hero?

Carol G. is a team leader and project manager in Cambridge, Ontario. Carol runs a professional blog, the FireHorse Thoughts.

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This entry was posted on Wednesday, January 20th, 2010 and is filed under Risk Identification, Risk Management, Risk Quantification & Analysis, Risk Response & Control. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

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