Christine Thomas August 27th, 2020

Doing Efficient Risk Management in 5 Steps

The five steps below are professional risk management techniques to apply to your projects, proven to be effective. 

Step 1: Identify the risks 

Right at the beginning of your project, after planning the activities to be carried out, you and your team must identify as many risks as you can imagine. That’s right, the maximum and not just the risks they consider most important. This is so that any risk that seems harmless (but it is not) is not left out. So, don’t worry if the list of risks gets a little big in this first step, as it will be shortened in the next step. 

Do not identify the risks of a project alone, trusting your experience, as people have different experiences and perspectives on the same risk. Thus, while a member of your team may feel that a particular risk has no relevance and should not be registered, another member may view the same risk differently, giving reasons for treating it as an extremely critical risk and one that can lead the project to failure. 

Step 2: Classify the risks 

After you have identified the risks, they must be assessed and classified. To this end, the probability and impact of each risk on your project must be estimated. Probability is the “chance” of this risk to occur and Impact is “how much” it will affect the project. 

Step 3: Plan for risk responses 

Having defined the most important risks, it is then necessary to plan the response actions that will be taken to prevent them from happening or at least reduce their impacts. At this time, it is also important to define who is responsible for monitoring each risk, as well as ensuring that the planned response is executed at the right time so that no risk is overlooked or disregarded. 

Description of the risk:  due to the use of new risk technologies, there may be incompatibilities, low quality, or even much greater difficulty than expected during the construction of the system, causing delays and additional costs to the project. 

In many cases, it is also important to determine “contingency actions” for the risks, that is, what will be done if it occurs. This is what is popularly called Plan B. However, given the purpose of this article, we are not going to delve into this subject. 

Step 4: Monitor the risks 

There is no point in doing the previous 3 steps if afterward you simply file your risk record and don’t look at it anymore. Therefore, monitoring the risks throughout the project is essential, for two main reasons: 

You will not always be able to completely eliminate the chances of the risk occurring, so those responsible for each risk need to be vigilant and monitor periodically to ensure that they are ready to execute the planned response at the moment it is necessary. 

The risk is alive! That’s right, the likelihood and impact of a risk can change at any time. Remember how the walls of the houses were lower in the past and the risk of theft was almost zero? Nowadays houses have alarms, security guards, dogs, electric fences, and much more.  

See that each step and field above is of fundamental importance for you to know the risks you will be dealing with and have a response ready to perform, eliminating the risk or, at the very least, reducing the chances of it occurring as much as possible. This is called anticipation and is the secret to drastically reducing the unforeseen in your projects, the overtime used to “put out fires” and most of the daily stresses due to lack of planning. 

Step 5: Record the risk management processes 

It is very important to create records of the processes. They are the ones who provide the fundamental information to improve the company’s methods and processes. 

Everything that is done through risk management must be traceable. There should be records of all activities planned and carried out to be accessed in future consultations or whenever necessary. 

Following these 5 steps will allow your business to easily mitigate risks within your project and your organization. Managing risks is an essential process for any business that wants to succeed and grow. 


Photo by CDC on Unsplash

Christine Thomas

I provide risk and compliance domain expertise to product designers and developers working on creating and maintaining our risk and compliance solution at 360factors.

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