5 Steps to Assessing Your Projects Risk

Risks are inherent within project management, and understanding how to properly assess your project’s risk can be the determining factor in its success or failure.

Additionally, failure to monitor, analyze, and mitigate risks in an effective manner results in an untrustworthy appearance to stakeholders. However, you can make assessing your project’s risk simple by following these five steps.

Step 1: Identify Your Project’s Risks.

Depending on your industry, such as oil and gas or constructions, you will need to identify any and all potential risks to your project. However, some risks may appear to be non-existent. For example, you may need to account for risks due to poor public perception of your oil-drilling project. Alternatively, you may need to identify risks due to heated political zones.

Step 2: Prioritize Risk by Impact.

After you have successfully identified all risks, determine the confidence level for each risk. Prioritize your list of potential risks by those with the greatest chance for impact. This will ensure you devote appropriate resources to the management of such risks.

Step 3: Assign Ownership of Your Project’s Risk.

Some risks may be outside of the scope of your responsibilities as project manager. However, members of your project management team may be able to assist with addressing each risk. For each risk, assign ownership to one or more of your project team members.

You may also need to assign some risks to executive-level management to address. For example, you may need to assign risks in funding resources to executive-level management or your program manager. This will ensure you do not become overwhelmed by factors outside of your control.

Step 4: Implement Decisions to Mitigate Risk.

Since each risk relies on previous experience for estimating the possible impact of the risk, you will need to implement evidence-based decisions to minimize risk impact.

Furthermore, your decisions must reflect differing degrees of impact scenarios. For example, how will your decision evolve if an event occurs? Will your decision need to remain the same or change to meet changing environments and risk factors?

Step 5: Re-evaluate Risks For Changes.

After implementation of a risk management program, you will need to re-evaluate your project for risk. This equates to checking your work for possible errors. You should review all risk processes and make any necessary changes to mitigate new influences and risks. Furthermore, you will need to re-evaluate risks throughout the duration of your project.

If you believe your project lacks any possible risks, you have missed something in your risk analysis. Risks will be always present, and some risks may not appear until you have completed these five steps. By fully analyzing and mitigating project risk, you can improve your successful completion chances and rates, which will benefit your reputation, your company, and your project management team.

Key Things to Remember

  • Identify all possible risks before attempting to mitigate any risks.
  • Analyze the confidence levels of each risk, and prioritize them accordingly.
  • Assign ownership and responsibility to each risk.
  • Use past experiences in devising strategies to mitigate risk.
  • Re-evaluate your project for risks frequently and routinely.