Managing Project Risks in Four Simple Steps

Mike has more than 12 years of project management experience spanning a variety of industries. He has acted as a consultant for federal, state and local government agencies; set up a PMO and managed strategic projects for a major automotive company in Australia; and currently is a Senior Project Manager in the Northern Colorado financial industry. Mike is PMP certified, a veteran of the USAF and has an MBA in finance and accounting.

  Risk Management  

What are project risks, and why do we manage them? In simple terms, a project risk is one answer to the question, “What could go wrong?” If you can anticipate potential problems that would impact your project’s quality, budget or schedule, taking steps to prevent them makes a lot of sense. Additionally, having a backup plan in place amplifies your ability to recover should one of those risks become real. Thus, risk planning greatly increases your overall potential to lead a successful project.

“No battle plan survives contact with the enemy.” – General Colin Powell

I say it a little less dramatically: “If you don’t have a Plan B, you don’t have a plan.” (Yes, you may quote me…) Let’s walk through the four easy steps to building a risk management plan. These steps are based on straightforward questions, which in my experience add a level of clarity that is sometimes missing.

1. List potential risks. To build this list, simply ask “What could go wrong?” or “What if…?” As you brainstorm the list with your team, assign a probability for each. You don’t need to get fancy or over-think it. Just give it your gut feel on the first pass. You can always adjust it later. Make it easy. Is it likely, or unlikely? Is the chance of this occurring high, medium, low? That…

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