Simple tips for controlling risks #1

Hi! Today I will write about the process of controlling risks. This is my personal summary based on my experiences and knowledge.

Its simple, really. What is this risk? This is some case or chance when something negative will happen. And our duty is to do something, to remove this chance or minimize the negative effects of this case.

Any process of controlling risks in all projects need to be divided into 4 main stages:

1. Predict the risk. We find all, what can happen with our projects on the all time development which can do something negative to us. And all negative situation have some initial indicators.

Example, when you have a deadline, before this you 100% had some time indicators, when you saw, that your team doesn’t make a task or the project. You hope and you trust, that you be in time… But you was late. What are you doing wrong? You lost this indicator. (Also, you can use some tips, which help you control of process development and show this indicator before).

Ok, just back to risk indicators, because they can help us to expect the approach of a problem.

All risk can divide by source types:

  • People (your team, employees and other people, which work in the project).
  • Technology (all risks by technology’s, programming rules, network, etc).
  • Business (all business process, law, finance, etc).
  • Company’s (risks from your competitors and partners).
  • Government (risk from the government or other supervisory authority).
  • Other (cataclysm, war, etc).

2. Estimate this risk degree. All in this world want to be the counted and risk is not the exception. Therefore, you need to find the answers on the two questions:

  • «How many chance to the occurrence of this risk?»
  • «As far as this risk will be strong?»

Again, it simple. You can use 4-stage chance as:

  1. Insignificant probability
  2. Low  probability
  3. Average  probability
  4. High  probability

and 4-point risk consequences as:

  1. Insignificant consequences.
  2. Average consequences.
  3. Significant consequences.
  4. Critical consequences.

It’s very interesting — we have 4 stage of chance and 4 stage the power of consequences. How we can understand and evaluate current risk?

Let’s create some table:

Insignificant probabilityLow probabilityAverage probabilityHigh probability
Insignificant consequencesaverage riskaverage riskcritical riskcritical risk
Average consequencesaverage riskaverage riskhigh-riskcritical risk
Significant consequenceslow riskaverage riskaverage riskhigh risk
Critical consequenceslow risklow-riskaverage riskaverage risk

Beautiful, right? This is a matrix of risks. When you defined your stages of chance and consequences, you need to compare your parameters with the indicators from this table.

What do you need to worry about? About red, orange and yellow color. But don’t forget would like to think about green risks.

Of course, this table is universal and you can use it in every project, but be careful and very attentive.

3. Just think about your «insurance» and what you need to do, to remove (or minimize) this risk. Can you do something and this risk don’t have a chance to approach? Are can you do something to this risk have a minimal negative effect?

4. What you need to do when risk is coming? What are you doing when the problem comes? Do you have any decisions?

Do you need to run around and panic? Do you want to your team panic with you too? Damn, are you a leader or you the hysteric squirrel? Think about this before problem approach in you project.

And don’t forget about all time risk-controlling, because this strange world like to changes (and your team and project too) and you need to be aware of everything on the all stages development.

As you see, even only this four steps can help you understand what is your global and main project risks and help you to minimize it approach.

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