Help Your Team Manage Project Risks with a Risk Response Plan

As a project manager, it’s your job to oversee a project from start to finish. This process includes oversight on initiation, planning, executing, controlling, and closing the project, all while maintaining company standards and meeting strategic goals.

Delivering projects or services in a timely manner is the project manager’s ultimate goal. You need to optimize your project management strategy with a project management methodology that works for your business.

Once you’ve defined this workflow, you’ll need to consider the risks associated with each project your business takes on.

New projects can, and likely will, come with fresh risks for your business. These risks include any unplanned events that impact your project’s costs, timing, or quality. These unforeseen circumstances are divided into two main categories: individual risks and overall project risks.

Individual risks are uncertain events or conditions that can positively or negatively impact your project’s objectives. Overall project risks represent the risks of the project as a whole and how these risks can impact shareholders and business owners.

Taking into account both individual risks and project risks will help you plan for every stage of your project and the impact each step can have on your business. To reduce risks, you can use the SMART risk response method.

SMART Risk Response

S.M.A.R.T. planning should be done during project planning stages to prepare for risk response in advance. When developing a project management risk plan, make sure you’ve reviewed each step of the  S.M.A.R.T. method:

Specific: Is your response plan relevant to the risk? Does it take into account the severity of the impact? If your risk response isn’t specific enough, it may have minimal effectiveness.

Measurable: Can you measure your risk response? Creating an actionable response plan tied to measurements can help you track the effectiveness. If you have no way to measure your risk response plan, you’ll never know if the implementation was successful.

Achievable: Does your risk response plan fall within your project’s budget and scope? Resources will have to come from somewhere during risk response.

Realistic: Will your risk response plan be successful? Can it guarantee results or predict them to some level of effectiveness?

Time-Bound: How long will your risk response plan take to be implemented? Does it fall within a time frame that makes the response effective?

Once you’ve outlined your project risks with the S.M.A.R.T. method above, check out our risk breakdown structure to make sure all of your risks are covered.

Recommended article: Understanding the Risk Breakdown Structure.

 It’s a great idea to use the P-I scoring method which rates the probability of occurence with the impact this risk will cause.

Project Management Risk in Action

One example of a popular project management risk is the project schedule. If the schedule is not clearly defined to every cross-functional team member that will touch the project, the risk of failure is high.

To prevent this project risk from occurring, it is the project manager’s job to hold meetings before the project starts detailing the tasks and the timeline for completion. These meetings should also include a backup plan for missed deadlines. It’s also a great time to communicate the impact of a missed deadline and how this can derail the project’s success and scope.

Once the project has started, a great risk response plan should include weekly project meetings where steps are discussed in detail. If deadlines are missed, address why this took place and an action plan to get the project immediately on track. If the project continues to fall behind schedule, consider scheduling additional workshops and training to streamline completion.

Recommended Project Management Software

If you’re interested in learning more about top rated project management software, the editors at actively recommend the following:

Meredith Wood

Meredith is the editor-in-chief at Fundera. She has specialized in financial advice for small business owners for almost a decade, and is sought out frequently for her expertise in small business lending. Meredith’s advice has appeared in the SBA, SCORE, Yahoo!, Amex OPEN Forum, Fox Business, American Banker, Small Business Trends, and more.