Hey! Are you doing risk management planning?

The answer better be YES!

"Please let this project go through without any issues!"

A new client told me the other day they don’t bother with risk management plans. “What’s the point,” he said, “It takes too much time and it’s always rush, rush, rush around here.” My response, “You have a problem, starting doing a bit of risk management planning – it doesn’t have to be as onerous as you think.”

First, let’s define risk management as it relates to project management. Risk management is when you identify, assess and prioritize risks to a project; the risk management plan is your plan for identifying, assessing, prioritizing and managing those risks.

Risk management must be a part of all project planning activities. When working on projects, I don’t try to work on risk management planning by myself – get the team involved! A bit of brainstorming works great in identifying risks. You’ll find that there are common risks from projects to projects – a bit of reuse of past project documentation (think lessons learned!) and you can save yourself a bit of work. But be sure to validate!

When analyzing risks consider these questions during your brainstorming session:

• What are the potential risks for this project ? (Consider both positive and negative risks)
• What is the likelihood of the risk occurring? (Prioritize base on the likelihood)
• If the risk does occur, what is the impact on the project?
• What can I do? Can I stop the risk from occurring? Can I reduce the impact of the risk should it occur? How much can I reduce the impact of the risk? If it does occur – what are my plans for reducing its impact?

Take these steps for effective risk management planning:

Identify the risks to the project, looking  at project resources, scope of project, whether a similar project has even been done before, project’s impact on the business, who the stakeholders are for the project, the timeline and budget for the project, and other relevant project information.

List all of the risks you identified during your brainstorming sessions.

Analyze the risks by determining the probability of each of the identified risks occurring and the impact on the project if the risk does occur. The higher the probability and the higher the impact if it occurs, the higher the risk on your list of risks to plan for!

Plan your risk responses. Remember – risks can be positive or negative. Develop options and actions on how you will handle the risks that occur. You might choose any of the following for negative risks:

• Avoidance: Making changes to the project to eliminate the risk completely.
• Transfer: Transferring responsibility of the risk to someone outside of the project.
• Mitigation: Taking steps to reduce the probability or impact of the risk.
• Acceptance: Accepting the risk and managing it.

For positive risks, you might choose any of the following:

• Exploit: Taking steps to make sure the risk happens since it is a good thing.
• Share: Sharing the benefits with someone outside the project who can help exploit it.
• Enhance: Taking steps to increase the probability and impact of the risk.
• Accept: Accepting that it might happen but not trying to make the risk occur.

Once you have mapped out your risk responses, assign owners to each of the risk and delineate the responsibilities of those owners (based on how you are responding to the risks.)

Document it all in a risk management plan and in a risk register.

Monitor and control. Of course, as the project manager, you’ll be monitoring and controlling all of the risks – following up with the risk owners to ensure all is going smoothly and on track.

This really doesn’t have to be an onerous process – and by getting the entire project team involved, along with stakeholders, you can really pull together what you need fairly quickly and efficiently. Once you do it once, you’ll find you can reuse much of the information on your next project – you’ll build some efficiencies into the process

So…your next project…do a bit of risk management planning!