PRINCE2® Themes – Risk Management

The purpose of the Risk theme is to identify, assess and control uncertainty and, as a result, improve the ability of the project to succeed.

Risk taking in projects is inevitable since projects are enablers of change and change introduces uncertainty, hence risk. Management of risk should be systematic and not based on chance. It is about the proactive identification, assessment and control of risks that might affect the delivery of the project’s objectives.

The project should establish and maintain a cost effective risk management procedure. The aim is to support better decision making through a good understanding of risks – their causes, likelihood, impact, timing, and the choice of responses to them.

Management of risk is a continual activity, performed throughout the life of the project. Without an ongoing and effective risk management procedure it is not possible to give confidence that the project is able to meet its objectives and therefore whether it is worthwhile for it to continue. Hence effective risk

management is a prerequisite of the continued business justification principle.

Risk management:

For risk management to be effective, risks need to be:

• Identified This includes risks being considered that could affect the achievement of the project’s objectives, and then described to ensure that there is a common understanding of these risks
• Assessed This includes ensuring that each risk can be ranked in terms of estimated likelihood, impact and immediacy, and understanding the overall level of risk associated with the project
• Controlled This includes identifying appropriate responses to risks, assigning risk owners, and then executing, monitoring and controlling these responses.

Risk Management procedure

© Crown Copyright 2009. Reproduced under Licence from OGC

PRINCE2 recommends a risk management procedure comprising the following five steps:

• Identify (context and risks)
• Assess (i.e. Estimate and Evaluate)
• Plan
• Implement
• Communicate

The first four steps are sequential, with the ’Communicate’ step running in parallel because the findings of any of the other steps may need to be communicated prior to the completion of the overall process. All of the steps are iterative in nature in that when additional information becomes available, it is often necessary to revisit earlier steps and carry them out again to achieve the most effective result.

In addition to our PRINCE2 Courses we can also arrange Risk Management course on a private basis on dates to suit.

Here's what we think are the 4 essential Project Management soft skills:

1/ Communication

So many issues arise during projects due to bad communication. This may be the Project Manager misunderstanding the requirements of the Project Board or team members not being given clear instructions.

Make sure you have the ability to both listen and explain. Listening really means active listening; not assuming based on past experience or pretending to accept their way while secretly planning to continue with your own methods.

Simple words at first and then more detailed points go along way when trying to explain a course of action or reason for one to team members. Nip any misunderstandings in the bud by asking for feedback. Get them to offer any problems they see or clarifications they require, upon explanation rather than days or weeks later, when some damage may have already been done.