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Managing risks throughout the lifecycle of your project is an integral part of project management. During the planning phase and onwards, all uncertainties must be taken into account and assessed to ensure the good execution of the project.
Understanding the risk management lifecycle can help you master the methods designed to anticipate adverse events that could negatively impact the project. You can then plan an appropriate response should they arise. Being able to develop alternative solutions to reach your objectives under all circumstances is the most important challenge in risk management.
This guide will give you an overview of the risk management lifecycle. Then, we’ll dive deeper into the risk management process and help you identify the risks attached to your project, assess their impact and imagine risk control strategies to mitigate risks.
Referring to risk management as the risk lifecycle emphasises the necessity for project managers to:
This business process should take place at all stages of the project, with risks being reviewed periodically so that mitigation strategies are always up-to-date. The events that could affect the project and the actions the team could take to lessen the risk should be monitored continuously.
This approach to risk management could be seen as a continual improvement process, whose goal is to ensure steady progress and compliance with changing internal and external constraints. There are 5 steps to the risk management process, which are discussed below.
As soon as the project starts, it is essential to:
How to identify the risk of the project? There are various methods you can use to establish a comprehensive list of risks:
💡 This document is called the risk register and provides the basis for most risk management processes. This document will be enriched with new information throughout the next steps of the risk lifecycle.
Once the risks have been listed, the next step consists of conducting a risk assessment. The goal is to assess the risk level, meaning to sort risks according to quantitative and qualitative criteria. These should allow you to categorise risks (high, moderate or low) regarding possible impact in terms of scope, delays or costs.
To classify risks, you should consider:
Risk mitigation is based on control strategies and careful response planning. The goal is to describe the actions to be taken to:
You should then designate the person responsible for this risk within your company, for example by using the responsibility matrix.
To define the appropriate risk response, base your conclusions on the sorted list of risks done during the previous steps. Consider their degree of urgency and priority: some will need to be dealt with immediately, while others could be solved in the medium or long term.
Set up a process for tracking and monitoring risks throughout the project development. This ensures that new risks are identified and always controlled. For effective risk management, the risk register should be updated on a regular basis, and the risk monitoring phase should go on even after the project has ended.
When new risks arise, reevaluate the measures taken previously. This is to check whether the methodology you used was accurate and relevant, or if it should be revised.
As a project manager, be sure to save your analysis and record your tracking to make the history available to others. This makes it possible to derive good practices for future projects from your experience. Accurate reporting is very important for stakeholders and your company as a whole.
To help you fill out the risk register, you may start your analysis with the following types of risks:
Mastering the processes associated with the risk management lifecycle goes a long way. Risk management should be agile, reactive and constant. It goes hand-in-hand with other key aspects of the project:
With the steps of the risk management process in mind and these last tips, you should be able to sail through the tides and to success!