In this article we show you how to manage project risk. Risk management is not difficult yet it is often neglected. Project risk is treated a little like writing a will-everyone knows how important it is yet it's a topic of conversation that's avoided and subsequently treated inadequately.
Contingency planning and risk go hand-in-hand. Indeed contingency planning is a last resort and should be considered for high risks only when it's not possible to prevent or avoid an event, reduce the impact or even transfer the risk to someone else. Contingency planning and risk management are often used in project management and business continuity planning.
The risk wheel is a simple tool I use when assessing project risk. The risk wheel will help you think through the types of risks in your project. Augment this with existing risk information from project or programme risk management plans or the corporate risk register.
It is easy to be brave when far away from danger. - Aesop The purpose of the risk matrix is to determine the risk category (very low, low, medium, high, and high*) so project risk may be addressed according to the impact on project schedule, cost, and benefit.
Once risks are identified, assessed, and countermeasures and contingencies established they should be documented in the project risk log and an owner assigned. You don't concentrate on risks. You concentrate on results. No risk is too great to prevent the necessary job from getting done.
Over the past few weeks we have addressed the first key project management skill: project risk management. Project Risk Management The project risk management series includes posts on the following topics plus a few tools for managing project risks, opportunities, and issues. Next up in this series on project management is communication.
Before I close my series of posts on project risk I thought I should address a related topic: project opportunity. Risk management is concerned with potential unplanned events that impact a project negatively. In contrast, opportunity can have a positive affect on the project.
In January of 1979, the city of Washington, D.C. suffered an unusually large snowfall. Due to a lack of functioning snow plows, traffic quickly ground to a halt. Reporters descended on the new mayor, Marion Barry, asking him for his plan for snow removal. Barry scowled, and then growled, "Spring."
