5 tips to help manage the unexpected and reduce risk in business

Planning and risk assessments can be dull, we know. But it’s a vital part of every project.

Just think how many times you’ve thought, ‘If only I’d planned for that…’ Getting a clearer view of your project could be the difference between success and failure.

Sometimes, expecting the unexpected by having the right processes, tools and systems in place can help you manage those surprise curveballs.

So, here’s five ways you can make sure that those potential surprises don’t derail a project completely.

#1. Spot potential risks

First things first, brainstorm with your team. Look ahead and identify any risks that could become problems within your project. From big blockers to little hurdles, the more you identify now the better. It could be practical risks, such as overspending on budget, to more complex risks involving legal or environmental issues.

They might not be as obvious as you’d expect. But by being proactive by taking a step back before you start to look at every aspect of the project, you’ll hopefully cover all bases.

#2. Work out the probability of that risk occurring

Once you’ve identified all potential risks, you’ll want to estimate the likelihood of each one happening. Working out if and when they might occur will help you to stop them before they happen. Put them on a scale of probability, 1 being the least likely and 5 being most likely.

#3. Note the scale and severity of each risk

You’ve identified the risks and how likely they are to happen. So, what’s next? Is the risk likely to derail your project or will it just cause a minor inconvenience? How big an issue would each one be?

You need to know to what extent each risk could impact your project or business. You can do this by giving each risk a simple subjective rating based on its severity.

This is key to gaining an understanding of the size of each risk and can help you prioritise them.

#4. Create a risk matrix

Before you put any control measures in place, set up a risk assessment matrix and score each risk or scenario against it. Rate the impact the risk will have on your project, 1 being ‘insignificant’ right through to 5 being ‘catastrophic’. Then score using the probability of the risk happening using the same 1–5 ranking, with 1 being ‘highly unlikely’, etc.

Then multiply the scores together to get a final figure. Anything that scores 10 or more should be flagged and investigated.

I.e. Risk A is likely and moderate

This means it scores 4 for probability and 3 for impact

So the equation becomes 4 (probability x 3 (impact) = 12

You can see a good example of a risk assessment matrix here.

#5. Review, review, review

If there’s one thing a project risk assessment should teach you, it’s that mistakes happen. So take steps to review your report regularly and reassess any controls in place. Set a date to review your project risk assessment again and stick to it. You’ll thank yourself later.

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