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According to most project management authorities, risk refers to a future condition or circumstance that could have an adverse impact on the project scope, budget, resources, and/or timeline if
it occurs—it hasn’t happened yet. An issue on the other hand is a current problem that must be handled because it is already impacting the project. The smart approach for the project manager is to manage risks before they become issues.
Project risks most often have a negative connotation: they are the events
that can harm your project. Your risk approach should also focus on positive
risks or project opportunities. These positive risks are unknown or uncertain
events that could benefit your project or organization. These opportunities
could make your project faster, better or more profitable. Carve out some
time to deal with the opportunities in your project. Some opportunities with a
high pay-off may not require a big investment in time or resources.
How do you manage risks? Three key steps will help you stay on top of
things.
Step One: Create a Risk Log. A simple Excel spreadsheet will suffice. Create columns with headings like these:
Rank Severity High/Medium/Low
depending upon the potential impact to the project.
Rank Priority High/Medium/Low
depending upon how likely it is to become an issue.
Step Two: Don’t simply log risks in the risk log and forget about them. A good technique is to present the risk and issue logs at weekly status meetings to keep people aware of the dangers lurking in their midst.
Step Three: At regular intervals, review the risk log and take
some follow up action on each one. Log the results. Keep track of
any follow up action or deadlines that could tip the risk over the edge.
In managing risks, risk response is a key activity that actually adds value
to your project. Dealing with threats offers you basically three options, risk
avoidance, risk minimization and risk acceptance. Avoiding risks means you organize
your project in such a way that you don't encounter a risk anymore. This could
mean, for example, change a supplier or adopt a different technology or, if it's
a fatal risk, terminate the project--a gutsy move, but maybe necessary. If
the risk is minimal, the team may just accept it as a normal circumstance.
Just make sure it doesn’t grow into a larger threat.
Some project managers think their job is just to create a list with risks but
the list is only a starting point. The next important step is to make clear who
is responsible for what risk! Someone has to accept responsibility to manage a
risk and accept the consequences if it is not taken care of properly. It sounds
simple enough to assign a risk owner for each risk that you have found but be
sure to get their buy in. The risk owner is the person in your team that has the
responsibility to optimize this risk for the project. You may find that at first
people feel uncomfortable that they are actually responsible for certain risks.
But as time passes you will find they will act and carry out tasks to
decrease threats and enhance opportunities.
Ownership also exists on another level—who pays the bill?. An important
side effect of clarifying the ownership is that line managers start to pay
attention more to a project when their money is at stake.
Manage risks—don't let them manage you
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