Planning for Risks

Every one of us takes risks on a daily basis. Just getting out of bed in the morning is a risk. You might stub your toe in the dark on the way to the light switch or trip over the dog and break a leg. These events don't usually happen, but the possibility exists. The same is true for your project. Risk exists on all projects, and the potential that a particular risk will occur depends on the nature of the risk.

Risk, like most of the elements of the other Planning processes, changes as the project progresses and should be monitored throughout the project. As you get close to a risk event, that's the time to reassess your original assumptions about the risk and your plans to deal with the risk and to make any adjustments as required.

Not all risks are bad. Risks can present future opportunities as well as future threats to a project. They may occur due to one reason or several reasons, and they may have multiple impacts. All risks have causes, and if the risk event occurs during a project, there are consequences. Those consequences will likely impact one or more of the project objectives, and you'll need to know whether the consequences have positive or negative impacts.

Risk is, after all, uncertainty. The more you know about risks and their impacts beforehand, the better equipped you are to handle a risk when it occurs. The processes that involve risk, probably more than any other project Planning process, concern balance. You want to find that point where you and the stakeholders are comfortable with the risk based on the benefits you can potentially gain. In a nutshell, you're balancing the action of taking a risk against avoiding the consequences or impacts of a risk. The rest of this chapter will deal with finding out what risk events might occur (and how to deal with those risks that are

unknown), determining an organization's tolerance for risk taking, and developing action plans for those risks you've determined have hefty impacts. The first step is performing the Plan Risk Management process. Here, you determine the approach you'll use for risk management activities and document your plans for them in a risk management plan. You'll look at that process now.

Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

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