Assessing Project Risks

Once you have established your objectives, you can develop plans for how to achieve them. Unfortunately, the best plans sometimes don’t work. One safeguard in managing projects is to think about the risks ahead that could sink the job. This can be done for critical objectives and for other parts of the plan.

The simplest way to conduct a risk analysis is to ask, “What could go wrong?” or “What could keep us from achieving our objective?” It is usually best to list the risks first, then think about contingencies for dealing with them. One way to look at risk is to divide a flip chart page in half, have the group brainstorm the risks, which you write down on the left side of the page, and then go back and list the contingencies—things you can do to manage the risks if they do materialize. An example of a risk analysis for a photography project is shown in Figure 4-2.

It is helpful to assess risks of failure of the following:

• The schedule

• The budget

• Project quality

• Customer satisfaction

One benefit of doing a risk analysis in this manner is that it may help you avert some risks. When you cannot avert a risk, you will at least have a backup plan. Unexpected risks can throw a project into a tailspin.

Risk analysis should not lead to analysis paralysis!

I mentioned this point previously, but it bears repeating: you are not trying to identify every possible risk, just some of the more likely ones. This point should be made to team members who are highly analytical or who perhaps have a tendency to be negative in general. Also, risk analysis always has a positive thrust—that is, you are asking, “If it happens, what will we do about it?” You don’t want people to play “Ain’t it awful!”