Five Easy Steps to do Risk Management
A Simple Strategy to Mitigate Threats and Enhance Opportunities
Dec 13, 2008
By asking yourself five simple questions you can perform basic risk management in your business (or even in your personal life). This is a strategy that allows you to decrease threats or bad things that might happen and increase opportunities or good things that might happen. You can perform this grassroots risk management on projects (at the start if possible) as well as in your ongoing, daily activities. It’s best if you are able to involve others on your team when reviewing and answering these questions. If you can’t, you can still manage risk by performing these steps on your own.
What Can Go Wrong? What Can Go Right?
Discovering potential threats and opportunities that may occur as a project progresses is easily done by just asking these two questions. Ideally, you would gather your teammates and anyone else who had a stake in your project and pose these questions and gather everyone’s input. As an alternative, you might email the questions to your team, asking them to respond, though you may not get a 100% response. If you can’t get anyone to participate or it’s not possible to ask anyone else, answer and document these questions yourself.
How Do We Decrease the Chances of Things Going Wrong?
One way to manage a potential threat is to ask how can we mitigate the risk or decrease the chances of the bad thing happening? For example, if you know there may not be a subject-matter expert available to provide content for a descriptive document on an application that your team is in the process of developing, you might remove that subject area from the list of items your project promises to deliver. This is considered “descoping” and usually requires others’ agreement.
How Do We Increase the Chances of Things Going Right?
Opportunities can be managed by asking how can we enhance the risk or increase the chances of the good things happening? For example, let’s say you are developing a process to implement a web-based software testing site. You know it could be used by other groups in your company to save time and money and increase testing accuracy. Given that, you could plan to include appropriate individuals or groups in your communications about the project, which would increase the chances of others adopting your process.
What Do We Do if the Bad Thing Happens?
Often called a risk response plan, this involves coming up with a plan of action if the bad thing happens. It really amounts to simple preparedness. For example, imagine if your primary resource on a project, say, the programmer, quit half-way through the project or was pulled off your project and onto another by his or her manager. What if you had prepared for this possibility by having earlier identified several other programmers who had the skills and potential availability to join your project?
What Do We Do if the Good Thing Happens?
Celebrate. Then implement your plan to increase the chances of the good thing continuing to happen. For example, let’s say you’re just launching a project to implement a web-based testing site, and you know the process and its efficiencies have the potential to be leveraged across your business. As your project moves along and people in your business begin to hear about the time-saving testing site you are building, they ask if they can learn more about this so they can implement something similar too. What if you were prepared for this by having already documented the basic process?
Resources:
Risk Management:Tricks of the Trade for Project Managers. Mulcahy, Rita. RMC Publications, Inc., 2003.
