How can you assess risks in your project?

1 Identify risks

The first step is to identify the sources and types of risks that may impact your project. You can use various methods to gather information, such as brainstorming, interviewing, surveying, reviewing documents, analyzing data, or consulting experts. You should consider both internal and external factors, such as resources, stakeholders, dependencies, assumptions, regulations, market conditions, or environmental issues. You should also categorize the risks according to their nature, such as technical, operational, financial, legal, or strategic.

2 Analyze risks

The next step is to analyze the risks in terms of their likelihood and impact. You can use qualitative or quantitative methods, depending on the availability and reliability of data and the complexity of the project. Qualitative methods involve rating the risks on a scale, such as high, medium, or low, based on your experience and judgment. Quantitative methods involve estimating the probability and consequences of the risks using numerical values, such as percentages, costs, or durations. You can use tools such as risk matrices, decision trees, or Monte Carlo simulations to help you with this step.

3 Prioritize risks

The third step is to prioritize the risks based on their analysis results. You should focus on the risks that have the highest likelihood and impact, as they pose the greatest threat or opportunity to your project. You can use tools such as risk registers, risk maps, or risk dashboards to document and visualize the risks and their ratings. You should also consider the interrelationships and dependencies among the risks, as some risks may trigger or influence others.

4 Plan responses

The fourth step is to plan how to respond to the risks according to their priority and nature. You can use four basic strategies to deal with risks: avoid, transfer, mitigate, or accept. Avoiding means eliminating the risk by changing the project scope, schedule, or design. Transferring means shifting the risk to a third party, such as a contractor, insurer, or partner. Mitigating means reducing the likelihood or impact of the risk by taking preventive or corrective actions. Accepting means acknowledging the risk and preparing for its occurrence by setting aside reserves or contingency plans.

5 Implement responses

The fifth step is to implement the risk responses according to your plan. You should assign roles and responsibilities to the team members who will execute the actions and monitor the results. You should also communicate the risk status and actions to the relevant stakeholders and ensure their alignment and support. You should also document the lessons learned and best practices from the risk response process and share them with the project team and organization.

6 Review risks

The sixth step is to review the risks periodically and update them as the project progresses. You should track the changes in the risk likelihood, impact, and priority and evaluate the effectiveness of the risk responses. You should also identify new or emerging risks and repeat the previous steps to assess and manage them. You should use tools such as risk audits, risk reports, or risk reviews to facilitate the risk review process and ensure continuous improvement and learning.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?