What Is A Project Risk

A project risk is something that has a good probability that it will occur, but not a guarantee that it will come to being. If it is a certainty, then it is no longer a risk but is an issue. Issues have a 100% chance of occurring, while a risk is somewhere between 0% and 99% chance of occurring.

But just because a project risk is not guaranteed to occur does not mean you should not be prepared for it. The old saying that an ounce of prevention is worth a pound of cure holds very true. It is nearly always easier to prevent a problem or minimize its impact than correct it once it has impacted your project with a negative consequence.

When dealing with a project risk, the first thing that must be done is to properly identify it. Some risks are inherent of a business while others are time restrictions or constraints. Whatever type of risk you have to deal with, make sure you know exactly what it is so it can be dealt with properly.

The next part of a project risk is to assess how the risk will impact your project and what are the probabilities that it will occur. These need to be analyzed for where they would fall on a scale of 1 to 10, with 1 being the lowest and 10 being the highest. If the total number adds up to 10 or more with a reading of 5 or greater on each assessment, then it should be classified as a critical risk. The higher the impact score, the more at risk your project will be in even if the score is not very high on the probability side.

Being ready to respond to a project risk correctly is part of being a project manager and your responsibility. Being prepared for all occurrences is the difference between a good manager and a great one. Know how to handle the different risks that could fall on your project.

The handling of a project risk can take several different forms. You can make it to be someone else’s responsibility and hope they do a sufficient job. Most of the time, it is best to prepare ways to lessen the impact of the risk, so if it does occur, the impact will be less dramatic.

No matter how you handle a project risk, make sure you are prepared to accept the consequences of it. This is because as the project manager, you are the responsible party in the project for its overall health and wellbeing.