Expect the unexpected with Risk Management
When we are faced with a crisis in the workplace many of us enter a fight or flight mode. Your adrenaline begins to pump rapidly through your body and your strategic thought process is compromised. It is during this time that we often make ‘in the moment’ poorly thought out decisions that we later regret. While hindsight can be a wonderful thing, majority of workplaces crisis’ are avoidable with a simple risk management process.
Risk management is a vital ingredient in any projects success. It is the process of identifying potential risk factors, analysing their severity and efficiently responding to them throughout the projects life cycle. Effective risk management strategies reduce the probability of an event occurring as well as the magnitude of its impact by identifying the projects weaknesses, threats and strengths.
One of the most infamous examples of the effects of poor risk management is the crisis of the Bank of America (BOA). When BOA implemented a scheme where it would charge customers $5 per month to use their debits cards the backlash was severe. The public created ‘Dump your bank Day’ and ‘Transfer Day’ in reaction the scheme and countless Americans closed their BOA accounts.
If the BOA had identified and analysed the reactions of customers and the backlash from its competitors through a risk management plan this crisis would have been avoidable.
The Risk Analysis Process
· Identify the risk
Brain storm all of the possible risk sources in the project and then categorise and prioritise by importance and possibility.
· Assess the risk
Problem solve- determine how best to approach the risk and discuss what would cause the risk and evaluate its impact on the project
· Develop response to the risk
Discuss how you can reduce the probability of the risk occurring and how the risk can be managed if it occurs
· Develop a contingency plan
Create a step by step response in the event that the risk occurs. This should be kept in a place accessible by management and easy to follow. This will allow quick action and reduction of impact should the risk occur.
· Track risks
Keep track of possible day to day project risks will assist in time management should the risk present possible in the future. Documenting the result of the risk and plan will also help improve your risk management process in the future.