Hoorah, if you’ve read this far then perhaps you’re convinced that risk management is a good thing to do, result! 

That’s assuming you read Part 1 of the Risk Management journey of course…

So now to the how…

Risk Analysis

Think about the project / idea and list out all the things you think could go wrong. What if timescales slip? Materials go up in cost? The global economy changes and that impacts on your work? Brexit means you cannot send things as easily as you used to? You lose staff from the project team? One of your suppliers goes bust?

Don’t worry at this stage how far-fetched or bizarre the risk, just write them all down. And as two heads tend to be better than one, you could brainstorm this with a colleague or ideally the entire project team too.

Risk Ranking

If we spent all our time worrying about every possible potential mishap, we would never get anything done. And so now we need to work out which risks need most attention. To do this, you could plot your list out on a grid as follows: how likely is this risk to happen? And if it did happen, how big an impact would that have?

All of your suppliers going out of business, meaning the entire project fails would have a very high impact, but it seems somewhat unlikely.

A few customers being not so happy about a small change to your product is quite likely to happen, because we can’t please everyone. How big an impact would that have? If it’s just a small number of customers, maybe it’s manageable? But what if they are very vocal on social media and stir up other customers too?

This is how you start to think through each risk, identify the medium to high level items and plan action.

Risk Management

Take your list of medium to high level risks and start to answer two questions. Again brainstorming this with a colleague or the entire project team, means you will gain more ideas, show that you are thinking ahead, and help you have ownership across the team for managing these risks.

For each risk:

What can we do to avoid this risk becoming a reality? Or reduce the impact of it? List as many options as you can. Then you can look at which options are most feasible, cost-effective etc.

If the worst happened, and this risk did become a reality, what could we do? How could we respond? List as many options as you can. Then you can look at which options are most feasible, cost-effective etc and record these as your plan B actions.

You might decide on review of all of this, that some of the risk-avoidance tactics are too costly. And so you choose to not take those actions, but instead rely on plan B. We hope the risk will not become a reality, but if it does, we know what we will do.

Risk Communication

Showing your stakeholders that you have considered and managed risks is great for your profile, and even better – your projects are likely to run more smoothly. So when you deliver better results and have projects delivered on time and to budget, that will do even more for your profile.

Communication is key, so that everyone knows what those risks are, what you are doing to avoid them and where the decision has been taken to have the plan B as backup.

It is particularly useful to have your stakeholders all agreed on which risk-avoidance tactics to use, and which risks will be left to plan B. Because we’ve all been there when something goes wrong and it seems everyone is out to find someone to blame.

Instead of you being the person to blame, because you decided alone on which risks were worth addressing in advance, it is better for your mental health and for the joint ownership of the project, for this to have been a decision by the team and stakeholders.

Tell the story of how you identified the risks, what you propose is done and what the plan B options are. Then ask for further ideas, amends and record all of this in your project plan or a specific “risk register” document listening out everything agreed.

And there you have it, you have managed risk!

If you are looking to build skills like risk management, project management, strategic thinking or business partnering, we can help.

We demystify jargony complex ideas into simple behaviours, showing people how to do the basics that make the biggest difference in their work. Get in touch and we can have a chat about what you need and how we can shape something that works for you.