Project Risk Management Made Simple: 3 Steps!

As a project manager, I know how important it is to plan for the unexpected. You can't control every aspect of your project; there will always be unforeseen things that come up—and they'll often throw you off course. That's why it's important to do an upfront risk assessment of your project and create a plan of action in case anything goes wrong.

How to Deal with Risk in Project Management?

To deal with risk in project management, you must identify the risk, analyze its potential impact, and develop a plan to mitigate or avoid the risk.

Identifying a risk means determining what events could potentially lead to a negative outcome on your project or task. Planning for those events means creating strategies in case they happen (and making sure they don't become reality). Mitigating comes into play when you're working with uncertainty—this could mean reducing the likelihood of something happening or simply being prepared if it does occur despite all efforts taken beforehand.

Step 1: Engage project stakeholders in identifying risk.

You can’t manage risks if you don’t know about them. That’s why it is important to engage project stakeholders in identifying and prioritizing risks. They will have information about the project and its context that you don’t have, and they may know risks that are not apparent at first glance.

Project stakeholders should be involved in the risk management process from day one. They should help identify potential sources of risk on the project, prioritize those identified risks based on their impact to the project, and develop response strategies for each one of them.

Step 2: Identify risk and analyze its potential impact.

Recognizing the potential risks of any given project is an important first step in managing them, but it's not enough to simply identify a risk—it's equally important to determine how significant (or insignificant) each one is. Having a clear picture of what could go wrong with your project will help you prioritize your time and resources most effectively, as well as identify areas in which you may need to enlist outside help from a third party or expert.

When evaluating your risks, think about:

• What would happen if this risk occurs? How severe would the impact be on my project? What's the likelihood that this will actually occur?
• If this risk does not occur, what do I want to happen instead? In other words, what's my plan B for dealing with this situation if it does come up?

Step 3: Create a risk response plan for each risk you identify.

Once you've identified the potential risks, it's time for action. You need to create a risk response plan for each risk you identify. The term "risk response plan" may sound scary, but it doesn't have to be! A good risk response plan is simple and easy to understand. The best way to make sure that your risk response plans are effective is by making them specific, measurable and time-bound (SMART).

A good example of what a SMART Risk Response Plan looks like:

• Specific - This means that the actions in your plan should be clear and concise, rather than vague or generic. For example: "To address this risk of low system performance due to memory shortage in phase 1 of implementation" vs "We will ensure that our system has enough memory resources throughout phase 1 implementation."
• Measurable - This means that there should be some sort of yardstick used as part of tracking progress against goals set out in your project management plan (such as cost or schedule variance). For example: "We'll monitor server performance during phase 2 implementation using standard metrics such as CPU utilization or disk throughput."
• Time-bound - This means that there should be a deadline by which certain tasks must be completed in order for an organization or individual's goals related with addressing a particular type/level/category/classification groupings etcetera.

In this example, the risk has been miniated by monitoring the risk throughout the entire development process. It also could have been mitigated by planning to increase the server's memory if the lack of memory becomes a problem!

Conclusion

As a project manager, understanding how to manage risk is essential for your success. When you create a plan for how to deal with potential threats to your project and its goals, you can minimize their impact and increase the chance of success. The key is communicating clearly with stakeholders about what risks exist so that everyone involved knows what they need to do in order for things to go smoothly.