The task of a project manager is to maintain the risk management process. Unlike popular beliefs, risks can be positive too. You can turn these risks into opportunities. Create a smarter plan and avoid doing the same mistakes in the next project, phase, or iteration. In this article at Continuing Professional Development, Vivian Kloosterman shares the 5 rules you should follow to create an effective risk management process.
Risk Management Rules
There are two factors of risk that project managers dread—possibilities and penalties. To avoid both of these, follow the below steps or rules for a better risk management:
- Risk Identification: Recognize, understand, and define the risks that your teams find out. Discover those risks and update them in your risk register.
- Risk Analysis: When you have jotted down all the risks, understand the possibility and the penalties each has in your project if at all it occurs.
- Risk Ranking: Combine the possibility and the penalty each risk carries to come up with the scale at which it would affect the project. For smaller risks, you can ignore the risk management. However, for the complex risks, you must address as soon as possible.
- Risk Response: In this part of the risk management process, you plan how to respond to the risks when they irreversibly occur. You can either plan to nullify the risk or lessen it to an acceptable or ignorable level. You can also turn some risks into opportunities or another project. For example, if a client demands new features during the last project review, start another project. Do not scrap the existing one. You can also create risk mitigation and contingency strategies at this time.
- Risk Control and Review: Have you been updating your risk register throughout all the steps? Well, this time it will come handy when you must track down the risks and monitor and control them.
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