PM ADVISORY

RISK DOCTOR BRIEFING

Risk Process Basics

By Dr David Hillson

The Risk Doctor

UK

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State of Project Success

What should a good risk management process cover? Anyone undertaking a risky or important venture should ask themselves eight simple questions:

1. What are we trying to achieve?
2. What might affect us achieving this?
3. Which of those things are most important?
4. What shall we do about them?
5. Have we taken action?
6. Who needs to know?
7. Having taken action, what has changed?
8. What did we learn?

These questions describe the steps required to manage risk. They can easily be expanded into a basic risk process, with one process step to answer each question:

1. Getting started (process initiation). Risks only exist in relation to defined objectives, and these are what we are trying to achieve. We cannot start the risk process without first clearly defining its scope and clarifying which objectives are at risk. It is also important to know how much risk key stakeholders are prepared to accept, since this provides the target threshold for risk exposure.

2. Finding risks (risk identification).. Risks only exist in relation to defined objectives, and these are what we are trying to achieve. We cannot start the risk process without first clearly defining its scope and clarifying which objectives are at risk. It is also important to know how much risk key stakeholders are prepared to accept, since this provides the target threshold for risk exposure.

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About the Author Vijay Aluwalia Author Dr David Hillson, PMP FRSA HonFAPM FIRM FCMI, is internationally recognized as a leading thinker and practitioner in risk management. He is Director of Risk Doctor & Partners (www.risk-doctor.com), and has worked in over 40 countries. He is a popular conference speaker and award-winning author on risk, with six books on the topic. David has made several innovative contributions to improving risk management, and is well known for promoting the inclusion of proactive opportunity management within the risk process, and for his ground-breaking work in risk psychology. David is an Honorary Fellow of the UK Association for Project Management (APM) and past chairman of its Risk Management Specific Interest Group. He is an elected Fellow of the Institute of Risk Management (IRM), the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA), and the UK Chartered Management Institute (CMI). David is also an active member of the Project Management Institute (PMI) and was a founder member of its Risk Management Specific Interest Group. He received the PMI Distinguished Contribution Award for his work in developing risk management over many years. Since 1998 he has been a core author for the risk chapter of the PMBOK Guide®, and is a core author for the PMI Practice Standard for Project Risk Management. David can be contacted at david@risk-doctor.com. To see his latest book, Managing Risks in Projects, published in July 2009 by Gower, visit http://www.gowerpublishing.com/isbn/9780566088674.