Manage The Risk Before It Manages Your Project
Every project has risks, and plenty of them. Being in business itself is risky and you haven’t built your business without taking a chance at times. In fact, a project that is risk free will probably achieve exactly nothing.
The key is to understand and accept that risks exist and to put in place a strategy to identify, assess and manage the inevitable risks that you will encounter.
Risk Management is all about maximising your chances of project success by identifying risks early on and then planning how to manage them, not letting them manage you and your project.
Our Risk Management process is a 4-step process, commencing with Risk Identification. In this step our experienced risk management advisor will look at the details of your project and identify the key risks that exist. At this initial step, the risks will be sorted into different categories, such as budget, business impacting, contract, etc. (we actually use over 20 categories to sort risks).
Once identified, each risk is assessed to better understand both the likelihood of it occurring and the impact or consequence to your project if it does occur. As a result of this assessment each risk is given a ‘score’ or a value, ranging from Extreme (very likely and catastrophic impact) to Very Low (rare chance of occurring and minor or negligible impact).
The third step after each risk has been assessed is to determine how to control or treat the risk. Obviously we start with the risks that achieved a ‘higher’ score and the treatments we consider include:
- Avoid – do not do whatever it is that will cause the risk
- Reduce – take actions to mitigate or reduce the risk
- Transfer – do something that will move the risk to a 3rd party
- Accept – choose knowingly to accept that the risk may occur regardless
The final step in our risk management process is to monitor the risk on an ongoing basis, until it either is no longer valid, or it eventuates and becomes an issue to be dealt with.
5 common project risks
Although every project is different and has it’s own unique risks, there are common risks that can effect any project, in any organisation. Here are 5 common project risks that we have identified:
- Poor Leadership – although a sponsor might be excited and supportive at the start of a project, this support can wane over time, leading to a lack of attendance at meetings, delays in decision making and hesitation in providing the financial support needed
- Staff Turnover – not something that is easily controllable as staff will leave your business for any number of reasons but something you should definitely plan for
- No Continuity – external factors can impact the ability for your project to continue uninterrupted, maybe you are moving office, or a key staff member is on extended leave. You need to consider these risks and put mitigation in place to avoid their impact
- Lack of Resources – this isn’t just about people but about any resource you need for your project. It might be not being able to get parts you need, or the meeting room being booked when you need it, or delays in an external party delivering their piece of the project
- Change to Business Strategy – not easy to predict but still possible is the fact that the business changes direction and the project takes a lower priority, meaning you might lose resources or budget, or your project might have to be put on hold indefinitely
Are you aware of the current risks to your project?
For a limited time we are offering a FREE risk management consultation. Book a session now with one of our risk advisors.