“Yes, risk-taking is inherently failure-prone. Otherwise, it would be called ‘sure-thing-taking.'” — Jim McMahon
Risk is defined as a potential exposure to danger, harm or loss. The above quote clearly states that nobody is safe from risks in life. The risk increases every bit with increasingly complex businesses or projects. A seasoned manager knows that a robust project plan will have a dedicated section on risk management. But, no plan is perfect! One needs to continuously monitor the plan and update it on a regular basis.
It doesn’t only involve disaster management, but also tackling huge uncertainties. One should take risks awhile to achieve success, but the difference lies in knowing the risks in advance and being prepared for it.
Professional judgement comes with extraordinary experience and skills of estimation. We help you to know the 5 steps of risk management that every manager has to know:
Have you identified your current and potential risk area?
Leaving out unwarranted risk would expose you to terrible outcomes which you can avoid if this step is implemented well.
Any illness, if not taken care of in the beginning, gets difficult to cure in the later stage. Thus, it is advisable to visit a doctor regularly to detect the illness before it arises!
VComply acts as a risk identifier with a dashboard replete with RAG analysis, intelligent reminders and reports.
In project management, depending on the length of the project you can plan regular monitoring schedules which shall let you assess the entire project from top to bottom.
After the first step, one should analyse the risk. Knowing the exact stage and nature of risk shall enable the user to find ways to eliminate the risk and change the plans accordingly. Also, you need to know the relevant outcome of the risk. Some risks can be avoided if they are quantified as low impact risks during the analysis. The Risk Matrix in VComply helps an user find the impact of non-compliance of a particular responsibility.
Evaluation of the outcomes is an important step. Is the impact of the outcomes worth the time and money spent? How big would be the loss due to the outcome becoming a reality? Knowledge of such questions needs deliberations and extensive analysis. One should not dismiss this step as a one time action but should repeatedly evaluate the outcomes as an when the risk arises.
How well do you respond to the stated risk?
Small risks may not affect your project at all. Yet, accumulation of such small risks may make matters completely worse if left unattended.
You should learn to document some kind of response, small or big, for every potential risk. Coping with the risk needs a robust plan of action. The company should communicate the plan extensively to all the project managers who are prone to such risks. Also, there should be regular training sessions on various risk updates.
No risk management plan is complete without continuous monitoring. The last step involves ensuring everything is going as it should according to the set plan. After an individual is cured of a major illness, the doctor regularly monitors the patient for signs of relapse.Thus, one should regularly monitor the risk plan to know the loopholes, if any.
Risk management can be tricky, but you can master it using various tools which are available in the market. As a project manager it’s your job to try and protect the company from potential internal or external harm
It is advisable to always be on a lookout for potential threats and plan accordingly! They say, one cannot eliminate risk , but can be mitigate it!
Click here to read what kind of risks every business should be aware of.
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