Relevance and importance

It is essential for all partners embarking on a project or joint venture to spend some time identifying possible risks and planning for uncertainty at the beginning of the project. It is often necessary to include a section on risk management in the proposal, so the earlier this is done the better.

However risks do not always arise as anticipated and there is a need for someone (typically the project manager) to be responsible for constant monitoring and managing risks throughout the project.

It is normal for people working on a project to produce a document called a 'risk log', which should contain all the risks identified at the beginning of the project, together with the corresponding 'mitigating actions' (i.e. actions you will take to minimise and deal with the problem caused by the risk). The risk log should be constantly reviewed and updated in view of changing circumstances.

Overview

At the beginning of a project, work with the team and the partners to produce a risk log containing :

	All the perceived events that might impact the project, both internal, such as loss of key members of staff, to external, such as the launch of a new product from a competitor.
	Classify the risks according to the possibility of them actually happening. For example - HIGH - very likely to happen, MEDIUM - might happen, LOW - very unlikely to happen.
	Consider the impact of these risks on the project. For example if a high risk event happens, does this mean you should abandon the project as it becomes infeasible?
	When you have assessed both the possibility of the risk and the impact of the risk, focus on those with a high chance of happening and a high impact on the project, agree a set of mitigating actions for each of them. Then produce a set of mitigating actions for all the medium and low risks too.

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Recommendations and practical tips

	Involve as many stakeholders as possible to produce the initial risk assessment.
	Document all risks in a risk log or similar document.
	Encourage everybody involved to be aware of the risks and to identify unexpected ones.
	Agree a person who is responsible for risk management.
	Agree a process for monitoring and controlling risks.
	Re-assess and update all risks frequently.
	Always be prepared for the 'unexpected', it always happens!

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Warnings and potential pitfalls

Even if the project appears to be going to plan and the anticipated risks are not causing problems, keep the risk monitoring and assessment process going.

If a major event occurs which threatens the whole project, it is essential to deal with it. Some people find that setting up an emergency meeting involving all the key people is the best way to deal with it.

There are times when it is best to stop and abandon the project, rather than carry on to deliver something that has now become worthless. This is a difficult decision and should not be solely the responsibility of the project manager, therefore involve all the stakeholders.

In the event of having to abandon the project due to major problems, always try and salvage something positive from it. This may be a partial product or something intangible like a good working relationship in the team.

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