This video defines project risk and provide an overview of why dealing with risks is important. It also discusses instances where you should deal with risk on your projects.
- Projects deal with change, and dealing with change is risky business, as many businesses don't handle change very well. My experience is that many project managers aren't prepared so they don't appropriately manage risk. When I talk about risk, I'm talking about things that haven't happened yet. There's a probability of some sort of event occurring that'll have an impact on your project. There are two major categories for risk, positive and negative risk.
Positive risks are often called opportunities. These are things that can happen that will enhance the outcome of your project. For example, your project team might make a breakthrough that cuts the time to complete a set of tasks in half the time. As there are typically more instances of negative things happening in projects that have to be managed, project managers typically focus on negative risk. Negative risks are events that could cause your project to be thrown off course, so it's vital that you pay attention to them.
Whether you're dealing with positive or negative risk, there are a standard series of steps to follow when managing risk. First, you need to identify the risks on your project. When you see something that will probably happen, you should take action ahead of time, before the impacts affect your project. Be proactive rather than being reactive. The second step is to assess the likelihood of a risk happening and determine which risks you will address.
You don't address all risks, as some, like an asteroid destroying your building, is so unlikely you won't want to deal with it via risk management. Addressing risks means taking action. Determining the actions to take is step three. This is to investigate alternatives to address your risks. You'll want to steer your project around the bumpy section of the road, or you might try to smooth out part of the road for a more comfortable ride. Using either alternative, the idea for you as a project manager is to control how much your projects are exposed to risk.
The last step in the risk management process is to control risks on an ongoing basis. This is important to do because risks change over time. You should frequently assess your project for the likelihood of a risk happening and its potential impact. Understanding the consequences of any risk will help you manage it appropriately. Any sort of change comes with a level of risk. It's how you manage that risk that makes all the difference.
Ultimately, project management is risk management. By clearly understanding your risks in light of what you're trying to achieve, your project has a greater chance of being delivered successfully, and you might not be perceived as a risk taker for working on your project.
Note: This course follows the latest guidance from Project Management Institute, Inc., as outlined the PMBOK® 6 Guide.
- Explore why dealing with risks needs to be part of the everyday process used to manage a project.
- Learn to outline the most common, pragmatic approaches to identifying risks specific to a project.
- Recall methods for qualifying and quantifying your risks to determine specific risks and manage their costs.
- Examine the primary considerations for a project risk plan and what components should be included in every plan.
- Assess techniques that help you identify the overall risk a project presents to your business.
- Examine several risk analysis and filtering examples that help ensure you've addressed individual risks properly on your project.