The Golden Rules of Project Risk Management

To ensure project’s success, you have to define how to handle potential risks so you can identify, mitigate or avoid problems when you need to do. Successful project managers recognize the importance of risk management. Here are some simple rules that support effective project risk management,
The Golden Rules of Project Risk Management:

1.      Identify Risks as Early as Possible

Early identification of risks helps in good planning for the right mitigation approach. The possibility of effective and efficient response to risks are higher with early identification.

2.      Make Risk Management Part of the Project:

Risk identification, analysis and response planning are not a one-time activity. You have to watch for risks all over the project duration. Risk discussion should be part of all project meetings and reports.

3.      All Stakeholders should participate in Risk Management

Risks may arise from all aspects of the project. In this context, you need all stakeholders to provide their insight in all risk management processes.

4.      Perform SWOT Analysis

SWOT analysis is a very powerful tool for risk identification and analysis. You have to consider your strength, your weakness, opportunities that your project/organization may benefit from, and threats that may impact your project/organization.

5.      Identify an Owner:

For each risk, there should be an owner. Unlike some managers may think, the project manager is not the owner of all risks. Many risks need some specialty and hence the owner must have specific qualification. The role and responsibilities of each risk’s owner must be clear to all stakeholders.

6.      Prioritize Risks:

Some risks have higher impacts than others. Check for showstoppers. Consider potential loss and gain while prioritizing risks.

7.      Plan and Implement Risk Responses:

Risk management is a continuous effort. Risk responses must be implemented well. Risks need to be monitored, contingency plans to be implemented if the risk occurs.

8.      Record Risks:

Risks must be documented. Activities executed and their results should be recorded.

Written by:

Mr. Waleed AlNaggar

MBA, PMP, MCP