What is risk management?

Risk management identifies possible events that may have an impact on a project and provides a framework process to manage those.

There are a number of methods and approaches to risk management. While there are differences in terms ways of reporting and management approaches, the processes for what happens in a project are similar in practice they tend to follow these steps:

  1. Identify the risk and record its potential event, probability, impact(s) and cause – sometimes as a whole team workshop
  2. Assess if it is in scope or to be escalated elsewhere
  3. Plan appropriate and proportional actions to deal with the risk (proportional is important: why would you plan an action that has greater cost than the risk’s impacts?)
  4. Make sure there are resources and actions in the project plan so that the actions decided are not missed
  5. Reassess the risk to see if it is now acceptable, has caused new risks, or if other action is needed
  6. Report risks, exposure to the impacts and progress on resolving them (a good indicator of project progress too!)
  7. Repeat at each major point in the project’s life-cycle (from step 1) and at frequent intervals (from step 5)

Or at least that is what is intended.  Too often project teams lose momentum on risk management and the process stumbles. Risk management is not a report but something that is scheduled into a project and actively pursued to improve chances of success.  It also ensures that at the post project review the team are not saying “that project went bad but we knew this could happen – its been on our risk list all the time”  (frustratingly common).

About 3triangles
Helping organisations make change happen in 3 key areas: strategic change, deliver tactical impacts, efficient and effective processes. All blog content (c) 2009 - 2012 Carol Long and Three Triangles Performance Ltd

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