Shona's solution – managing risks
In the last step you looked at possible risks to Shona’s project.
Keeping track of risks is important. Identifying risks helps you plan ahead, and put plans in place to mitigate or control them.
A risk log is a document that allows you to record and monitor risks and the steps you take to mitigate them. When you have identified a risk, you assess how likely it is to happen, and how much impact it will have if it does. Multiplying together the scores for likelihood ‘x’ impact gives you a risk rating. The higher the risk rating, the more you should do to contain the effects of that risk; if a rating is very high, you should consider stopping your activity altogether.
In this step you will go through a sample of Shona’s risk register. First, download the document from the Downloads section.
Then, read through the document and note the different areas that she has filled out for her project, a dog show being held at her venue. As you read, think about each of these questions and how they might relate to your own project or problems:
What’s the likely outcome for each risk?
In the sheet, each risk is added to its own row. Each risk has a title, and an outcome: that is, what will happen if the event occurs.
Risks can stem from all kinds of things. They might be financial, safety related, or involve staff and visitors. People bring risks because their behaviour is not always predictable. Reputation risks also affect the perception of the organisation; you should plan for what to do if you have a PR disaster.
If you’re struggling to think about risks for your project, you can use PESTLE to prompt you, and refer back to your SWOT analysis to see if any weaknesses or threats represent a risk to your project.
How will you mitigate or control a risk?
When you identify a risk, you also work out what you should do to mitigate it. These are steps you can take to reduce the likelihood of the risk occurring, or to control the impact if it does occur. In Shona’s case the hazards associated with gas bottles are well known and there are recognised ways of dealing with them. If you have more unusual risks you may need to think of ways that you can manage them.
Whose responsibility is it to manage the risk?
When you enter a risk in the register, you should make a note of the date it was raised, who raised it, and who it is assigned to. The person assigned is responsible for taking any actions needed to control or mitigate the risk. They will need the right support and tools to do this. You should also make a note of when you should check in to see if the risk is being managed, has got more severe, or gone away.
How likely is it that the risk will occur?
When you have identified a risk, you need to think about how likely it is to occur. Some risks are very unlikely (for instance, a giant meteorite wiping out your event). Others are almost certain to happen (dogs are highly likely to make a mess at a dog show).
You rate likelihood on a 1-5 scale, where 1 is very low, with about a 1-in-100 probability of an incident happening. A score of 5 is very high, a near certainty. 3 would be in the middle.
Judging probabilities can be hard, and it can help to get estimates from the whole team, then take an average of their responses.
How bad will it be?
Next you think about the impact the risk will have if it occurs. Impact might mean a cost overrun, missing deadlines, legal issues or physical injuries.
Some risks might be trivial; they’ll cause a bit of a problem, but can be easily dealt with. Others might be really serious, and cause fatalities if they happen, for instance, a fall from a height. Again, you rate the potential impact from 1-5, where 5 is very high. Risks that have a very high impact are quite rare, but need to be taken seriously.
Rate the risk, and review it regularly
Once you have scored a risk for impact and likelihood, you multiply the two scores together to get a risk rating. Using a spreadsheet means it will do this automatically for you. You can also colour the cell red if the risk is high. This scale helps you compare all of your risks against each other, and tells you the kind of action you should take to mitigate and control the risk.
Risks that are high or very high need careful monitoring and planning. A very high risk, for example scoring 25, probably indicates that you should absolutely not go through with your idea.
You should review your risk register regularly throughout the project, as a way of reminding yourself to anticipate problems and take action to keep your project on track.