Managing Your Project Risks
There is not a project that is ever initiated that has no risks at all; these have the potential to adversely affect or even derail the project if not handled correctly. Identifying and mitigating project risks is an essential activity for the project manager and the team as a whole, to help to ensure success. Identifying risks is not a one-time activity, it should be done as an ongoing part of the project and it must begin very early in the project lifecycle. Once identified, mitigations need to then be put in place to reduce or remove the potential impacts that these risks can have on the project outcome.
Once identified, each risk needs to be analyzed so the detail of exactly what it involves, and how it might impact the project, is understood. Once all this detail is known and articulated, the project manager can then determine how best to tackle the risk. There are different strategies for dealing with identified risks:
- Take no action to mitigate the risk – in this case, you will simply accept that the risk may happen and deal with the consequences if it does. This is only really an acceptable strategy when the impact of the risk on the project is relatively small.
- Define mitigation actions that will reduce the impact of the risk if it happens.
- Define mitigation actions that will stop the risk from happening at all – this is called risk avoidance.
- Pass the risk on to someone else, for example, taking insurance transfers the risk onto another company.
Apply ratings to your risks that represent firstly how likely the risk is to happen, and secondly how severe the impact will be if the risk does materialize. These ratings will help you decide which strategy is appropriate. For example, a risk that has a very high likelihood of materializing, and, if it does will have a high impact on the project’s success, will need to have mitigations put in place. Choosing a strategy of ‘ignoring’ the risk is not likely to be appropriate.
As the project progresses, it is important to keep an eye on the progress of risks. If the mitigations fail, once the risks materialize, they turn into issues that are happening and will need action plans to resolve them. Most project managers will want to record their risks and issues in a project log that is available to the team. Online project management applications, like Basecamp, Central Desktop and Wrike, offer centralized storage for project-related information that can be accessed easily over the cloud.
The management of risks is an activity that is fundamental to successful project management and needs to become an integral part of day-to-day project activities for both project manager and project teams. For more information on online project management tools that can support all aspects of project delivery, please see: