How to deal with risks in a project

8 – HANDLING RISK

Knowing how to deal with risks in a project successfully is how project managers and organisations build their reputations.  So how to deal with risks in a project is at the heart of what the project manager needs to understand.

Any project involves uncertainty – not being entirely sure what is going to happen.  The aim though is to define those potential events which could quite possibly occur, and would affect the project in a harmful way if they did. These are risks.

Risk management is about identifying those risks, finding ways to either eliminate them or deal with them, and having plans in place to react effectively should any of them actually occur.

Managing risk successfully is how project managers and organisations build their reputations.

The architect Frank Gehry burnished his reputation through the way he approached risk on the Guggenheim Bilbao project in the 1990s.

Some projects are more risky

8.1 – What is risk?

Understand why some projects are more risky than others. Building a cable car system up a mountain, seen on the video titles, would be generally more risky than, say, building a railway across flat terrain.  We examine the reasons why.

Few projects would be as risky, or as entertaining, as Philippe Petit’s daring high-wire traverse between the towers of the World Trade Center in 1974.

You will learn:

• Why risks are so important in a project.
• What are the big risks in a project.
• What is the definition of risk.
• What is the difference between risk and uncertainty.
• What are the main sources of risks in a project.
• What types of risk occur in different phases of the project life cycle.
• Why some projects are more risky than others.
• How to assess the types of risk there are in a project.
• What is a good risk management model.

How to classify risks to be able to analyse them

8.2 – Risk assessment

Learn how to identify and analyse potential risks your project could face. 

You will learn:

• How to identify potential project risks.
• How to classify project risks.
• What are the probability and likelihood of a risk.
• What are qualitative risk ratings.
• What is groupthink.
• How groupthink makes a project more risky?

Understand which are the risks to worry about most

8.3 – Risk analysis

The probability impact table and risk matrix are useful tools to help identify the most pressing risks.

You will learn:

• What is the probability impact table.
• How to use the probability impact table.
• What is a project risk matrix.
• How low probability risks can have a huge impact.
• What are nightmare or black swan risks in a project.
• How to drive risks out of a project.

How to decide which risks to focus on

8.4 – Dealing with risks

See what options there are to handle each risk and plan what to do if it actually happens.

You will learn:

• What ways are there to deal with a project risk.
• How to eliminate a risk in a project.
• How to avoid a risk in a project.
• How to reduce a risk in a project.
• How to transfer a risk in a project.
• How to share a risk in a project.
• How to take risk out of the output design.
• How to de-risk the design of the output.
• What is the right response to risk at different points in the project life cycle.
• What is the big bang approach to project delivery.
• What is the step by step approach to project delivery.
• How to allocate risk effectively.

Running the risk situation day to day

8.5 – Risk administration

How to deal with risks in a project is not just about identifying them and analysing them.

See how risk management through the project is a dynamic process. Certain risks will disappear, and new ones will arise, so understand why a disciplined approach to risk management is essential.

You will learn:

• What is the risk management process.
• How to get the right balance of risks across a project portfolio.
• What early warning systems can be used to detect project risk.
• What are project opportunities.
• How to take advantage of project opportunities.

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