Tiffany's Tip of the Month

How do you assess risk?

At Ready2ACT, we help various companies anticipate, assess, and prepare for risks to their projects.  Most large companies, have processes in place to plan, monitor, and control their risks.  However, there are some common pitfalls to avoid when you conduct a risk assessment. 

Here are the steps with tips:  

1. Identify the risks.  It's important to be descriptive and specific about what the risk is.  If you don't understand the true risk, then it'll be impossible to complete the next three steps.
2. Qualify the risk.  You can do this in terms in Probability and Impact or Likelihood and Consequence. This step tends to be subjective and requires discussion among team members to ensure that everyone understands and agrees with the risk description and its qualification.

3. Quantify the risk.  Some companies simply use scales of 1-10, others use more complex, weighted systems. Regardless of the rating system, ensure that it accurately reflects each risk because you'll use it to rank all the risks from highest to lowest for monitoring and control purposes.

4. Plan risk responses.  There are several risk response strategies.  A common one is called, "Mitigation", meaning it is a pro-active approach to reduce the probability and/or the impact of the risk.  Most mitigation strategies involve scope, cost, time, and resources, so you'll need to estimate the impact to your project before deciding if the mitigation is worth reducing the risk.

Whether your risk assessment is formal or in your head, always do a risk assessment.  Here's video demonstrating all four steps in action. As you will see, sometimes the mitigation strategy can cause another risk.

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