How to Handle Project Risks

6 Tips on Dealing with Risks Related to Your Project

Nuvro Project Management Blog

When it comes to dealing with project risks, a proactive approach is highly recommended. Diligence is required to attempt to identify and prepare for risks before they occur and to handle them as efficiently as possible if they do occur. The following tips offer insights that can help project managers handle project risks.

Study the Project Planning Document

Project Risks

When beginning the planning portion of a project, many project managers first focus on reviewing the project’s scope. This enables you to go over the project’s deliverables and the roles associated with various stakeholders. At the same time, you should also start to identify risks associated with the project. To accomplish this, search the scope document and other project documents for requirements that appear unrealistic or are not properly defined. Time and budget specifications should be carefully checked to make sure they have been estimated properly.

These two areas are where errors are most likely to occur, making it imperative that every effort is made to get ahead of any problems as early as possible. They are also typically the areas that upper management and major stakeholders focus on most intently, so reducing the risk of problems in these areas from the very start of the planning process is good policy. Any issues you discover in the planning process should be raised with management to make sure both to improve the chances of remediating them and to go on the record with your analysis.

Examine Projects with Similar Characteristics

Each product has unique aspects, but you can still learn a lot by studying the history of projects with similar characteristics. Whatever the result of these projects, there is likely to be some useful information you can uncover from the methods used to complete them. Check the documentation turned in by the project managers in charge of the projects, and seek the PMs out for an interview if you’d like to get more information about the steps they took in running the projects.

A key area to consider when it comes to analyzing project risks is whether new technologies or methodologies will be used on the project. While using new approaches such as this may well be justified for a particular project, doing so nevertheless adds a degree of uncertainty to project implementation. These new technologies or methods can require extra training, and may result in unexpected results that trigger project setbacks. Some of these issues may truly be unknown unknowns which can’t be predicted in advance, but many possible issues fall into familiar categories that you can takes steps in advance to minimize. To accomplish this, specify as many potential issues that can arise from the new elements as possible in advance of project implementation.

Brainstorm Risk Identification

To improve your chances of identifying all relevant project risks, invite everyone with a stake in the project to take part in a risk discovery brainstorming session. This enables you to take advantage of different points of view and skillsets in digging deep into the details of the project plan to find risks. It improves your chances of compiling a comprehensive list of potential risks by adding in risks that you might not have thought of yourself. A variety of roles can be useful in helping to identify risks, including:

  • Managers from all levels of the organization
  • Quality assurance staff
  • Systems analysts
  • Product users
  • Developers
  • Investors and other stakeholders

Make sure that you have an experienced moderator lead the brainstorming session. Rather than delving into the potential consequences of each risk, focus mainly on adequately identifying it and determining whether it is relevant to the project. You can perform more significant analysis of the risks believed to be germane at a later time.

Be prepared to follow up with the participants after the brainstorming session to perform an in-depth analysis of the risks they have identified. If some individuals with the expertise to help with the process aren’t available for the brainstorming session, offer to set up one on one meetings with them or ask them to write up their thoughts in an email.

Analyze Project Risks

Once you have identified the risks facing the project, the next step is to analyze them. To do this, rank the risks from most significant to least significant. The risks that pose the greatest threat should be considered first, and the most extensive effort should be put into remediating them. Risks at the bottom of the list may not be worth taking active steps to counteract, if doing so would involve a greater investment in time and resources than could be gained from preventing the risks from occurring.

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Prepare Mitigation Measures

When you’ve finished analyzing project risks, it’s time to start preparing mitigation measures. Mitigation involves two steps:

  • Taking steps to prevent the risk from occurring
  • Preparing a plan to handle the risk it if does occur

This procedure should be applied to every high-level risk. If you have the extra time and personnel to do this for lower level risks, that’s great. If not, just focus on mitigating the most serious risks facing the project. Collaborate with team members when designing risk mitigation measures to ensure that you have access to the full range of knowledge and skills represented on the team.

Risk mitigation does not necessarily mean suppressing a risk entirely. Instead, it is focused on steps you can take to contain the damage caused by a risk. This could involve taking steps such as:

  • Moving to a backup process
  • Bringing in replacement personnel
  • Changing project task order
  • Arranging to have excess resources ready in case they are needed

Monitor and Revise the Risk Assessment

An initial risk assessment may need to be adjusted over time. As a project gets underway, new risks may crop up, or old risks may reoccur. Your mitigation efforts, even if they initially are successful, may develop flaws over time. To guard against this, you need to monitor risks throughout the course of the project, and revise their assessments as warranted. Staying on top of risks, both potential and realized, is not easy, but it must be done to optimize your project management efforts. Make a habit of rigorous risk assessment and active risk monitoring to prevent unforeseen risks from knocking your projects off course.

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