Managing the Risks

Good Practice: The task of the Project Manager is to identify the most severe risks and plan to minimise them. Throughout the project you should continue to focus on the major risks facing the project, which will change over time. This helps to maintain a focus on the areas that need to be addressed. You should consider using a risk mapping approach:

• Identify the project objectives.
• Prioritise the objectives.
• Identify the key risks to missing those objectives.
• Take preventative action.
• Track and update regularly once a week/month using a risk log.

There are four risk management techniques your may employ to manage the risks to your project:

Avoidance: Use an alternate approach that does not have the risk. This mode is not always an option. There are programmes that deliberately involve high risks in the expectation of high gains. However, this is the most effective risk management technique if it can be applied.

Control: Controlling risks involves the development of a risk reduction plan and then tracking to the plan. The key aspect is the planning by experienced persons. The plan itself may involve parallel development programmes, etc.

Assumption: Simply accepting the risk and proceeding. However, there can be a tendency within organisations to gradually let the assumption of a risk take on the aura of a controlled risk.

Risk Transfer: Means causing another party to accept the risk, typically by contract or by hedging. Liability among construction or other contractors is often transferred this way.

"Never expect initial risk management plans to be perfect. Practice, experience, and actual loss results will dictate changes in the plan to allow different decisions to be made in dealing with the risks being faced. In order for companies to succeed in the twenty-first century, they need to excel in all aspects of their business, which includes risk management, so they can fulfill their own and their customer's goals." ¹

Notes: "To run away from risks is to miss the whole point. To ensure project success, you need to take the right risks and you need to be aware that, that is what you are doing."