Most organizations have a 70% rate of project failures. The reasons could be:

  • Unclear project scope.

  • Over-budget.

  • Schedule overrun.

 

There are many more reasons why a project failed so easily, but has anyone questioned about the 30% of successful projects?

 

One of the reasons which I believe is these 30% of project managers manage their project risks well.

““Risk is an uncertain event or condition that, if it occurs, has an effect on at least one [project] objective.

- from the PMBOK (PMI)

Therefore, if you don’t manage the risks in your project properly, they will eventually turn into problems and when they aren’t manage well again, your project deliverables will be affected.

How do you manage project risks?

Identify them

Start your project by identifying the project risks. While it is easier to be said than done, identifying risks is never an easy thing. What I would do is to gather all my project team members and start looking into each requirement and think about the risk that could occur. Once I have them in a spreadsheet, I move into my activity list and do the same thing as above which is to think about the risk that could occur again. You can spend another session to have a free discussion among your team members just to see if there is any new risk that can be identified.

Once you had listed all these risks, put them into a spreadsheet as mentioned. This is what PMI name it a Risk Register but you can name it whatever that comforts you.

 

Rate & rank them

 

With all these risks, you wouldn’t be able to tell if they are high or low priority. This formula can guide you into ranking your risks. First, create two columns on that spreadsheet and name them Impact & Probability.

From the scale of 1 to 5, rate your risks’ impact if it occurred and probability of the risk happening with 1 being lowest and 5 being highest impact and probability. Once you are done with this, create another column and name this column Rating. The output of your rating is the multiplication of the Impact and Probability.

With this, the highest rating means the risk that you should pay more attention to compared to the lower rating risks. I would sort my risk from highest to lowest rating from this point onwards.

 

Mitigate them

 

Once you have sorted your risks, you can work on the mitigation plan. Start off by creating a column and name it “Mitigation Plan”. For each risk, plan on how you want to mitigate it. You can refer to this entry on the type of risk responses that you could apply. Having the risk mitigation plan will give you a guide during your project if the risk occurred.

 

Monitor them

 

The next thing that you should do is to keep an eye on your project risks. Monitor your project closely and always refer back to the risk register that you have to see if any risks might occur. Remember that you should always keep your friends (project deliverables) close, and keep your enemies closer (project issues and risks).

 

Conclusion

 

Never underestimate the power of project risks. Successful project managers who are capable of delivering successful projects had all their risks managed properly. If you want to have a good project record from now on, start risk management and planning now. 

 

About the author: Alan Tay is a project manager who runs IT security projects and the owner of Project Detective, a project management blog, where he often publish tips on project management and useful software to manage projects. Learn how to manage projects effectively from him today over at his blog.