Risk is the uncertainty of a negative outcome resulting from an action or inaction, from known and unknown factors. Risk can be a source of potential benefit or harm, therefore managing Risk is a fundamental part of successful organizational and project management.
As organizations and projects become more complex, the relationships between key elements and stakeholders complicate the assessment by increasing internal and external dependencies. With increasing external focus on effective risk management,all project personnel must be equipped with an understanding of project risk and how it may be systematically assessed and managed to reduce threats to successful project completion.
- Identify underlying problem or evolution whose execution is subject to risk management (Cause-Effect diagram for Root Cause Analysis, Pareto charts, dependency, why-why, and Fishbone diagrams, mind and cognitive mapping, etc.)
- Identify risks (human, operational, reputational, procedural, project, financial,technical, natural, political, and unknowns).
- Identify stakeholders and level of participation (Vroom-Yetton-Jago model and participation ladder) and decision overlap.
- Identify stakeholder communication strategy
- Conduct SWOT (strength, weakness, opportunity, threat) analysis and weighted risk assessment (weighted decision tree diagram).
- Identify potential biases and unintended consequences.
- Plan mitigating actions.
- Develop implementation plan.
- Apply actions
- Assess both actions and processes, and compare with intended result (gap analysis).
- Perform lessons learned assesment and identify possible areas for improvement.
- Provide feedback and continuing assurance to all stakeholders.