Risk management is one of the most important aspects of project management. Without it, you are taking a risk that your project may not succeed. There are a number of things you can do to mitigate risks, such as identifying and assessing them, developing a risk response plan, and monitoring and controlling risks. By incorporating risk management into your workflow, you can reduce the chances of something going wrong and practically ensure that your project is successful.
Starting With the Basics: What Is Risk Management?
Risk management is the practice of anticipating, identifying, assessing and mitigating risks to a project. It is an important part of any risk management workflow, as it helps ensure that potential risks are identified and addressed early on, before they can cause any serious problems.
There are a few key ways to identify risks to a project; it begins by anticipating potential problems associated with this kind of project workflow. This step also involves brainstorming all of the potential risks that could affect your project, no matter how unlikely they may seem:
- Identify what could go wrong - This includes looking at all aspects of the project and thinking about what could potentially go wrong. This can be done by brainstorming with the team or conducting a risk assessment.
- Look at previous projects - By looking at previous projects, you can identify any potential risks that were not anticipated. This can help you plan for risks better and avoid them in the future.
- Identify external factors - There are always external factors that can affect a project, such as changes in the market or political environment. It's important to be aware of these factors and how they might impact the project.
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Risks are a given for any initiative or enterprise across industries. No wonder, PMI has dedicated a detailed process around risk management as part of their PMP certification.
Projects small or large all involve risks. Having the right understanding and strategy to handle risks is crucial to the project success and the enterprises’ too.
Risks can be of various types and probability and can be lurking across various corners of your project be it regulatory, natural, competition, change of business landscape, advent of disruptive technology. You name it.
Take the e.g. of Nokia and Research in Motion (RIM). Both were the super powers of the mobile phone industry. But the risk of not adopting to the new technology and user sentiment cost them their business and drove them almost to a point of no return.
To begin with, it has to be a mainstream activity and a must-have component of your projects. Right from the beginning!
It is a tough ask; no doubts about it. And neither is it everyone’s cup of tea.
