This is part of an extended management course. You can dip into it, or follow the course from the start. If you do that, you may want a course notebook, for the exercises and any notes you want to make.
We are now at the end of our series of blogs, looking at some of the essential models that a project manager will need. We have covered:
- The Project Lifecycle (25 February 2014)
- The Triple Constraint (4 March 2014)
- Stakeholder Management (11 March 2014)
- The Critical Path (18 March 2014)
- The Gantt Chart (25 March 2014)
- Risk Management (here)
Project Management blogger Glen Alleman (at Herding Cats – a trenchant blog by a serious heavy-weight project manager) describes risk management as the way grown ups do project management. I thoroughly agree (and have written a book on it, ‘Risk Happens!’ to boot).
Why does he say this? I can’t speak for Glen (I wouldn’t dare) but my own feeling is that professional project managers have nailed the planning process as a fully developed skill set. So all the uncertainty in your project – and therefore the difference between success and failure – lies in the risk. This must take up a large part of your attention.
So let’s see how to do it…
The Risk Management Process
Risk Management is a simple process:
- Identify anything and everything that you think can go wrong
- Analyse each potential risk and prioritise them by assessing the impact of their consequences, and the likelihood of them happening. High likelihood, high impact risks are your top priority, and low impact, highly unlikely risks can be deliberately set to one side – you cannot ignore them, but you can choose to do nothing.
- For everything else, plan what you will do. Will you:
- mitigate the risk by reducing its impact?
- reduce the risk by making it less likely?
- create a contingency plan in case it materialises?
- find someone else to take the risk for you?
- Once you have your plans, put them into effect
- Review the outcomes of your interventions and, if necessary, plan and take further steps.
We analyse risks against their potential impact, their likelihood, and sometimes other factors like how soon they might affect us. The commonest tool is a chart of impact versus likelihood, onto which we plot our risks. The best approach is to keep it simple. Here is an example…
From the Management Pocketbooks series: