Login with Facebook

All you need to know about risk management

Some too many inexperienced managers neglect risk management, an essential step in project management, regardless of scope. By not considering risk prevention at its fair value, we condemn ourselves to endlessly repeating the same failures. Slackening risk management is nothing but a serious management error. Let's see how to identify the risks of the project and assess them to control them better.

What is risk management?

It is the process of analyzing, identifying, and controlling the threat to the organization's earning and capital. Risk is a more or less foreseeable possible danger that can affect the outcome of the project. It will not be possible to eliminate them all, and zero risk does not exist.

The whole question rests on the ability to anticipate the risk:

Are we capable of estimating the probability of occurrence of the risk and anticipating the possible impacts in terms of severity if the worst happens? How to prevent them? And, if so, how can it be remedied to cushion the impacts?

These are questions that deserve specific answers. But beware, not all risks are predictable, and you will have to reckon with the intangibles.

How to assess the risks?

Of course, it is inconceivable to consider guarding against all the dangers inherent in running a complex project. It is essential to carry out a complete and reasoned study of the more or less foreseeable potential risks to go beyond the stage of founded or unfounded beliefs. Rigorous analysis is a good guarantee of success. The simplest approach takes place in five major steps. The "heat" card

The following heat map is an example of a breakdown of the risks inventoried, taking into account the criticality and the probability of occurrence.

The red, "high heat" zone lists unacceptable risks at no cost. The yellow zone, "of medium heat," identifies those who require previously defined palliatives. Those in the green zone are acceptable according to the conditions defined when the table was drawn up.

The five steps of the Analysis method

Now let's see how to proceed in order to start the project while limiting as much as possible the risks of failure. This process takes place in 5 major steps, each as important as the other.1st step: Establish the risk inventory.

It is a matter of raking broad and considering all forms of risk (human, financial, organizational, and technological)

Type of potential risks: financial, organizational, technical, social, environmental are taken into account without exception.

- Information sources: Field surveys, exploration of the archives, analysis of the memory of previous achievements, consultation of experts. A wide consultation of all those who have approached a similar project in the past is a precious source of information.

- During this study, we understand the importance of establishing a memory of the projects carried out, whether they succeeded or failed. 

2nd step: Valuing risks

Not all risks have the same probability of occurrence, and not all risks are equal in terms of criticality. It is a question during this stage of carrying out a rational classification.

- Gravity: The abscissa axis of the heat map above. This involves assessing the criticality of each risk in terms of impact, damage, and consequences. Again, we will not hesitate to explore the "collective" memory of past projects.

- Probability: The ordinate axis of the heat map above. Next, the criticality is evaluated in terms of probability of occurrence. This exercise is not the easiest, you can imagine. Precision is quite relative.

3rd step: Define the displays

For each risk, we will ask ourselves these three successive questions:

- Can we eliminate it?

- Can we limit the effects?

- Should we modify the progress of the project?

- Eliminate the risk. Is it possible to eliminate it by increasing resources or by integrating into the team new and more experienced specialists in the subject? 

The cost will be one of the main judgment criteria.

- Limit the devastating effects of potential claims. Likewise, the solution is often on the side of optimizing resource management.

- Revise the project: Should we modify the orientations, limit the specifications, and find more peaceful alternatives even if they moderate ambitions and proceed with simplifications? A precaution to be taken on a case by case basis.

- Do not hesitate to limit the scope of the project to gain visibility. Short and quickly implemented projects are easier to manage and integrate into existing projects. 

4th step: Identify the critical points

This step is often forgotten in risk studies. The risks are changing. The probability and criticality evolve as the project progresses. Certain phases of the project are more at risk than others. You have to identify them.

- Places and/or times when the probability and/or the gravity are the most important, the moments of the course where it will be necessary to redouble vigilance.

5th step: Revise the risk table

The risk table is not static. It should be reviewed regularly.

- Monitor the evolution over time of the criticality.

- This table is not static, nor is it insurance.

- Predicting danger is not protecting yourself from it!

- In addition, the potential dangerousness, as well as the probability of occurrence, evolves over time and progress.

- This table will be carefully monitored and updated very regularly.

How to do it?

Well, by involving as many people as possible, by digging through the archives, by encouraging the experts to communicate whatever they are, wherever they are? All the ups and downs of past projects, as well as the difficulties and how to solve them, are a wealth of resources for reflection prior to risk management. But it is still necessary to have taken care to record past experiences. The care taken during the course of each of the risk management stages is of paramount importance for the success of the project. The method proposed here is developed and detailed in the practical guide "The effective project manager," whose latest edition further strengthens this aspect.

Known risks and unknown risks

In fact, there are three categories of risk:

1) Known risks

2) Risks that we do not know but that we could know

3) Risks that we do not know and that we cannot know

Depending on the degree of maturity of the company in terms of project management, category number 1 will be more or less important.

Risk management, such as the one we have just carried out, aims precisely to transfer a maximum of potential risks from category 2) to category 1).

The risks of category 3 are not the famous black swans; these risks that we consider a priori impossible. These are all the risks that one will not think of, even with a perfectly conducted analysis.

Projects were combining in terms of complexity, a maximum of unknowns such as a technology that is too young, a project that is too long with multiple impacts, stakeholders that are too numerous and not very federated, etc.

In short, everything that complicates a project will increase this third category of unknown risks that we cannot know. The solution seems to make sense, and it is a plea for short projects, even if it means multiplying them to achieve the desired end.

- How to prevent risks

It is hardly possible to protect yourself from all the risks that threaten the successful completion of the project. That said, with good habits, you can easily prevent a good part of them. The first and most essential of these habits are to communicate. To communicate is to speak, to explain, but also to listen. It is to provoke discussion and invite all the company's actors, direct and indirect stakeholders, to give as much information as possible. Let's see what happens when the project manager prefers to stay in his corner.

- Successful risk management

Already we do not put anything into it. A lack of preparation is not a risk but negligence. In any case, risk management does not eliminate all risksrisk management, and it is better to stay alert.

Author: Vicki Lezama


Comments

Need a custom
essay?

We will write it for you.
Order now

Free Essay Examples

Free essays:

An insight into the error-correction models
All you need to know about management discipline?
A historical overview of Financial Crises
All you need to know about reaction kinetics?
Business innovation ideas for making money
Biosensors for cancer diagnosis
Business Analysis: Pricing strategies and Demand Curve
Broadcasting: How to Be Good In Front of the Camera
Conflict management in an organization
Can social media help overcome the problem of illiteracy?
Cultural heritage of indigenous people.
Consumer and Firm Behavior
Digital Illiteracy
Determinants of business cycles fluctuations
Determinants of Unemployment and Inflation
Different tissues of the body
Expected Utility
Everything you need to know about workplace diversity
Efficiency and Market Equilibrium
Everything you need to know about cell culture
Factors Affecting Purchasing Behavior
Financial Statement Analysis
Factors Influencing Interest and Exchange Rates
Fiscal and Monetary Policies in Response to 2008/2009
Game theory in microeconomics
Globalization: definition, causes, social impact and risks
Gene expression: what it is and why it is important
Global environmental issues
How to conduct economic research?
How to define the Enterprise Value
How cancer is developed - Cancer biology
How can financial illiteracy harm you?
Illiteracy in the USA
Importance and seven principles of quality management
Intermediaries and Government in Financial Crisis
Introduction to Econometric Application
Journalism: What is News?
Journalism: Broadcast media and Television Presenters
Journalism: Sources of News
Journalism and Law
Key Determinants of National Income
Key Factors That Affect Pricing Decisions
Kinetic models in biology and Related fields
Know about the different forms of traditional African dances
Latest technology trends
Latest dance trends
Methods of labeling of nucleic acid that enable their detection
Macroeconomics: International Economic Issues
Neuromuscular disorders
National Economies, Fluctuation, and Responses to Fluctuations
Neurotransmitters: what they are and different types
Nanomedicines to target tumors
Organizational motivation and its effects
Overcoming Hiring Challenges for Nonprofit Organization
Protection of cultural heritage in times of war and peace.
Principles of Corporate Governance.
Risk and the value of information
Reverse discrimination.
Role of media in wartime.
Role of technology in the modern business environment
Segregation in the US.
Stages of the Consumer Decision-Making Process
Structure and function of blood vessels
Skills in Journalism: Effective Interview
Theories of Public Policy
The Economics of Uncertainty – Introduction
The different medical imaging techniques
Tips for labeling medical devices- Medical Entrepreneurship
Understanding Auctions and Auction Theory: Part 2
Understanding Auctions and Auction Theory: Part 1
Use of Machine Learning in Econometrics
Understanding Public Policy
Various theoretical perspectives of sociology
Virtual reality, what it is and how it works
What is Immune System and Immunotherapy?
What are the methods of valuation of companies?
4 Facts about Origin of Mathematics!
5 techniques to create an animation
10 emerging technologies according to World Economic Forum
10 strategies to maximize corporate profits
3d Model Of Building
6 Medical Technologies that revolutionized the healthcare in 2020
All you need to know about the ACA Code of ethics
Architecture and Democracy: An Introduction
Architecture and Democracy: Democratic Values
Architecture and Democracy: Democratic Procedures
All You Need to Know About a Synthesis Essay
An essential guide to understanding Film Theory
Application of Artificial Intelligence in Cyber Security
Applications of electrical engineering
Augmented reality: what it is, how it works, examples
Advantages And Disadvantages Of Social Networking
All you need to know about Cryptography
Applications of astrophysical science
All you need to know about architecture engineering
Applications of geological engineering
Artificial intelligence and medicine: an increasingly close relationship
An insight into Computational Biology
ACA code of conduct
A Rose for Emily
Applications of Mathematics in daily life
Architecture mistakes to avoid
All you need to know about Toxicology
All you need to know about Holistic Medicine
All you need to know about linguistics
An introduction to Linguistics and its subfields
All you need to know about Anxiety disorder
All you need to know about Drones
A Brief Insight into Political Science
Assumptions related to feminism
All you need to know about Byzantine emperors
All you need to know about labour economics
An insight into xenobots -the first-ever robots
An ultimate guide about Biomaterials
A Comprehensive Introduction to the Mona Lisa
Analysis methods of Transport through biological membranes
An ultimate guide about biochemical reactions
Analysis of brain signals
Artificial Gene Synthesis
Application to synthetic biology of CAD methods
All you need to know about metabolic pathways
Applications of BIOMEMS
All you need to know about the epidemiology
Asian vs. western leadership styles
All you need to know about Smart prosthesis
Analysis of Economy: Output of Goods and Services (GNP), and GDP on Economic success
A Guide to Pricing Strategies
An Overview Of Economic Studies
Analysis of Fiscal and Monetary Policies
Analysis of Business Cycles
Analysis of Consumption and Investment
A Look into Regression Analysis
Analysis of Household's Consumption and Savings Behavior
All you need to know about Capital Budgeting
All you need to know about risk management
Art looted in wartime.
Appropriate use of Data in Economics
All you need to know about reaction kinetics?
A historical overview of Financial Crises
All you need to know about management discipline?
An insight into the error-correction models
How to Write a Personal Essay
Housing Needs in America
How to Write a Description Essay
How to Create an Excellent Scholarship Essay?
How to write a cause and effect essay
How to Hire the Best Essay Writing Service Provider?
How to Write a College Application Essay?
How to get the most out of your English lectures
How to write Expository Essay
How to succeed in your psychology class?
How to Write an Academic Essay in the Shortest Time?
History of Journalism
How Different Sectors are Using Artificial intelligence (AI)
How to write an informative essay
How to deliver persuasive essays?
How to Give a Convincing Presentation
How to write an essay on leadership?
Historical Art Still Around Today
Humanoid robot: what it is, how it works and price
History of Chemistry
Healthcare Advanced Computer Power: Robotics, Medical Imaging, and More
Healthcare AI: Game Changers for Medical Decision-Making and Remote Patient Monitoring
How to understand different types of English
How to Cope with Chronic Pain
How African American choreographers and dancers have influenced American dance
How mobile robot can do in logistics or in production
How To Become a Successful Entrepreneur
History of the Philosophy of Feminism
How is the climate changing?
How to Track Your Content Marketing ROI
How to Gun control In the USA?
Historical and contemporary role of labour in the modern world
How breast cancers are classified?
How the cells of our body communicate?
How the Lymphatic System Works?
How Digestive System Works
How to complete your capstone projects effectively?
How to write a research project
Healthcare technologies that help patients with better self-management
How to choose the topic of the senior capstone project
How to make your business survive at economic crisis
How can immigrants blend in the American society?
How does the economics of war affect society?
Hate speech on social media.
How to Build an Economic Model
How to start a healthcare startup?
How can financial illiteracy harm you?
How cancer is developed - Cancer biology
How to define the Enterprise Value
How to conduct economic research?
Introduction to Urban Studies
Importance of dance in education
InMoov: how to build an open source humanoid robot
Importance of KYC verification to making the Blockchain secure
Importance of Rhythm
Importance of dance student evaluation
I/O control methods -types and explanations
Identity theft: what to do?
Introduction to Utilitarianism
Importance of 3d Modelling in Architecture
Importance of online journalism
Image processing in medical diagnosis
Introduction to USA Politics
Introduction to Comparative Politics
International Relations as a Major in Political Science
Importance of modern trade policy
Introduction to Journalism
Introduction to Writing a TV Script
Introduction of Microfabrication techniques
Introduction to Microeconomics
Interaction of Consumer and Firm Choices in Markets
Importance of corporate sustainability
Issues in International Monetary Macroeconomics
Introduction to Statistics and Data for Economics
Introduction to Data and Probability for Economics
Introduction to the Game Theory
Introduction to Econometrics
Introduction to Economic Information
Introduction to Market Equilibrium
Introduction to Economic Models and Application
Introduction to Empirical Research
Introduction to Econometric Data
Importance of Critical Thinking, Principles, and Goals
Introduction to Identification and Causal inferences
Introduction to Econometric Application
Intermediaries and Government in Financial Crisis
Importance and seven principles of quality management
Illiteracy in the USA
The Looming Energy Crisis in America
Top benefits of performance-based engineering
The More Languages You Know, The More Times You Are a Man
Things to consider while writing an Argumentative Essay
Top Ways to Improve Your Academic Writing Skills
Tips to Excel in Creative Writing
The origins of films in the early 19th century
Top career options in Architecture
The Elevator Pitch
Top finance trends 2020
The basic Structure and functionality of robots
The Way to Success
The election system of the President in the United States of America
Two-party System in United States of America
Top trends in urban design
The history and theory of African American filmmaking
Top benefits of creative writing
Tinnitus Guide: Common Symptoms and Treatment Options
The language of dance
The digital image processing management
Top famous politicians of the World
Top methods of political science!
The history of the feminist movement
The blood flow in cardiovascular system - Biofluid Mechanics
The best of Leonardo Da Vinci
The Structure and Function of Macromolecules
The structure of cell: a research on the bricks of the human body!
Tissue and organ construction: Adhesion and recognition between cells
The kinetics of the transformation processes
The Modeling of Biological Systems
Tips for writing a great thesis statement
The Defense mechanisms against infections
The impact of the technological innovations in medicine
Top journalism trends to know about
The relation between mass media & politics
Theranostics: Diagnosis and Care through Nanoparticles
The practical Applications of X-rays
The applications of Ultrasound in medicine
Transfer mechanisms of genetic information in Bacteria
The regulation of cellular metabolism in the diagnosis
The Principles of MRI Contrast agents
The technical basis of optical coherence imaging
The New Media: Emerging Trends
The Structure of Interest Rates and the Yield Curve
Technological perspectives and reflections of neural engineering
Types of bioreactors and their applications
The Role of Government Policy in Improving Economic Outcomes
Types of corporate responsibility
The Role of IMF in International Monetary Macroeconomics
Tools for investment decision making
The concept of Organizational Culture and its applications
The Conduct of Monetary and Fiscal Policy
The Basics of Financial Accelerator Models
Tips for labeling medical devices- Medical Entrepreneurship
The different medical imaging techniques
The Economics of Uncertainty – Introduction
Theories of Public Policy
What is a Definition Essay?
What are diagnostic essays?
What is the relation between art structural engineering?
What is a Narrative Essay
What are robotics and intelligence systems?
What are the benefits of studying health sciences?
What is artificial intelligence and why it matters?
What is comparative Literature?
Why study neuroscience
What is Wi-Fi and how does it works
What is French history famous for?
What are Humanistic Studies?
What is covered in Biophysics?
What is modern journalism?
What is Virtualization? Benefits & Applications
What are modern public relations?
What is plasma physics?
What is teacher preparation?
What is rapid prototyping for 3D printing?
What is contemporary European Politics?
Why should you learn American Ballet?
What is engineering physics?
What is the purpose of African American Literature?
Ways to learn the Rhythm
What is digital art used for?
What are Enzymes and how do they work
Who is the father of political science?
Why Study Political Science - Job?
What is the Philosophy of Feminism?
What is a quantum computer?
Ways B2B Startups Streamline Their Conversion Strategies
Why do biomedical signals need processing?
What are the long term effects of climate change?
Why study labour relations
What is Holoprosencephaly?
What is antisocial disorder?
What are the important principles of evolution?
What is the cytoplasm and its function?
What is biopolymers?
What Makes a Good Leader
Women empowerment in modern generation
What is the history of political thought?
What is Gene recombination
What is synthetic biology
What is business cost analysis?
What is Inflation
What are the consequences of unemployment?
What is lithotripsy and its types?
What is transition elastography?
What is the purpose of deep brain stimulation?
What is a Brain-Computer Interface (BCI)
What is neuroethics?
What is Market and Supply and Demand
What is optogenetics?
What are the techniques to record brain activity?
What happens if the interest rate increases?
What is immunotherapy?
What is the economic role of the financial market?
What are the factors behind illegal immigration?
What is the lymphocyte activation?
What is financial market and its types?
What is the structure of financial markets?
What are the methods of measuring business performance?
What is the Credit market?
What is business ethics and code of ethics
What are the Causes of financial instability?
What is MBA with Concentrations
What is regenerative medicine?
What is Population ecology?
What is Microfinance: evolution, and practices?
What is biotechnology and its applications?
What are Workplace diversity and its benefits?
What is the difference between a leader and a manager?
What Is Branding and best branding Business strategies?
Why are microelectronics important?
What are biologic drugs.
What is the Foreign Exchange market?
What is the role of scientific research in times of crisis?
What are the risks of international trade?
What is financial management?
What is gene therapy?
What is education economics?
What is regression analysis, and why should you use it?
What Is Technology Marketing And How Should It Work?
What is Management Accounting
What are the methods of valuation of companies?
What is Immune System and Immunotherapy?