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How to Manage Risks on Your Project

project delivery project management risk Jun 09, 2023
How to Manage Risks on Your Project

Many families are in the middle of graduation season. Children are graduating college, high school, middle school, or, it’s even now a thing for kids to graduate kindergarten. Graduations are often accompanied by parties, which all have one thing in common: RISK! Parents that want to throw a party for their graduate are faced with risk every step of the way. What if it rains? What if the caterer doesn’t show up? What if flights are delayed for out-of-town guests? What if Uncle Charlie gets drunk, again? 

Tim Sweet, a guest on the The PMO Leader’s podcast Great Practices, substituted the word “fear” for “risk”. Fear really puts risk into perspective. Parents are afraid of the party getting washed out, not having food for their guests, or Uncle Charlie saying or doing something stupid. That’s why it’s smart for parents to have contingency plans in place, like an indoor location for their party or an Uber on stand-by to bring Uncle Charlie home. 

Are you scared of what can go wrong on your projects? You should be. That’s a big part of a project manager’s job. Risks (the potential of something going wrong) that turn into Issues (a risk that has gone wrong) can stop a project dead in its tracks.  Consider the following suggestions for identifying, mitigating, and managing risk (aka fear) on your next project:

  • Create a Risk Management Plan - A risk management plan is your roadmap or playbook on how you will deal with the threat of risks to your project. Think through how risks will be identified, assessed, and mitigated, and who is responsible for each of these critical activities. Determine what monitoring looks like and how frequently risks should be reviewed. Include any templates, escalation procedures, or other administrative guidance that someone who may be new to the company would find easy to follow. 
    Everything from this point forward will tie back to this risk management plan. 
  • Identify and Assess Risks - When a brand new, shiny project is put in front of you, get the team together and start brainstorming everything that could possibly go wrong. Throw everything into the mix, no matter how big or small. You want to identify all risks that could derail this project, regardless of how remote the chances of it occurring may be. Some project managers call this “The Wheel of Misfortune” exercise, and turn it into a game. 
    Then, start assessing the risks to determine Probability and Impact. For example, what is the chance of a graduation party getting rained out? High, Medium, or Low? If you live somewhere in the Northwest United States where rain is a common occurrence, it would be High. Then, define the Impact; again, High, Medium, or Low. If it rains and there’s nowhere else to go, the Impact would be High. You now have a High probability risk with High impact to the project. There clearly needs to be a plan in place to mitigate this risk. On the other hand, if a risk comes in as low probability and low impact, you may choose to ignore it. 
  • Develop a Response Strategy for Each Risk - Now you have a list of risks that could possibly occur sorted by probability and impact. Work down the list and determine if you are going to avoid, mitigate, transfer, or accept each risk. Let’s use the potential of the graduation party being rained out as an example of each one. 
    Avoidance - You could choose an indoor venue for the party or have one ready as a backup to eliminate the risk of rain altogether. 
    Mitigation - You could set up tents or canopies to minimize the impact of rain in the event it does happen. 
    Transfer - Transfer the risk of damage to rented party equipment to a third party or rental company that offers rain damage protection. 
    Acceptance - It’s all good. You’re aware that it may rain, but you’re okay with the effect it will have on the party. Let your guests know ahead of time, and in the event of a deluge, have somewhere for them to go. 
  • Obtain Stakeholder Support and Buy-In - Nobody works in a vacuum. Even though you may feel that the assessment and response strategy for each risk is spot on, others may have different opinions. Meet with your manager, project sponsors, and other stakeholders to make sure everyone is in agreement with your proposal. For example, is your graduate okay with the chance of the party being in the rain, and your spouse with the muddy mess that will be in the house after everyone leaves? You may be okay with it, others may have different feelings. 
  • Monitor and Track Risks - Risks are not static and are constantly changing. Risks you identified may no longer be something that could go wrong and new risks could pop up to take their place. Set up a regular cadence (at least twice a month) to review your risk register and adjust accordingly. 

Since it’s always project season in our world, a risk management plan is necessary to mitigate that pit-in-your-stomach feeling of what could go wrong around the corner. While there’s no guarantee there won’t be rain or cloudy skies on your next project, we can guarantee that you’ll sleep better at night knowing you have a backup plan in place.  


How to Manage Risks on Your Project  

A project manager’s job is to bring a project to completion so it can start delivering business value. Risk is present in every project and, if not managed properly, can derail the best planned project. What can you do to mitigate these risks? 

  1. Come Up with a Risk Management Plan - Your plan should include everything that you will do to identify, assess, and mitigate risks. Include templates, processes, and procedures and make sure you have everyone’s buy-in: from other project managers on your team to your boss and project sponsors. 
  2. Execute Against that Plan - For each project you manage, create and follow the above plan, and make any necessary adjustments. 
  3. Capture Lessons Learned – Throughout the duration of the project review what risks are actually realized, and which ones never came to fruition. This helps fine tune future Probability and Impact assessments with Risks on the current project as well as future projects. Implementing what you’ve learned can save time and resources: your time won’t be spent on something you thought was going to be High Probability and High Impact but ended up being Low Probability and Low Impact. 


Issue - Problems or challenges that have already occurred or are currently happening within the project and require immediate attention and resolution. 

Risk - Potential events or conditions that may occur in the future, either positively or negatively impacting the project.  

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