How to create a risk management plan

1. List the risks
Your first step is the most crucial - to make a comprehensive list of risks that may affect or jeopardise your project. It’s a good idea to group these into categories such as human resources, costs and third party suppliers. Even the smallest details need to be taken into consideration because all too soon a minor issue can escalate into something far more serious.

2. Prioritise the risks
Once you’ve created a comprehensive list of risks in each of the key areas of a project, it’s time to examine them in far greater detail. While doing this, you should first consider the likelihood that they will occur and the potential consequences if they do. By doing so, you can allocate sufficient resources to mitigate each particular risk. It’s important to treat this stage as a collaborative one in which you take the advice of specialists in particular fields, as often they can add insights that may otherwise be overlooked.

3. Develop an action plan
At this stage, you need to decide on a strategy that can be brought into play if any of the identified risks do occur. Far more than just how you intend to deal with each risk, this should spell out individual responsibilities within your team and should also establish a chain of command to be followed by all those involved. Naturally, having specific contingency plans for all scenarios is absolutely crucial.

4. Communicate your risk management plan
The final stage is to cascade all the necessary information about your risk management plan to everyone who is in involved in it. This will not just be your direct employees but everyone who is involved in the project, including clients, suppliers and all other stakeholders. By sharing the facts, communicating individual responsibilities and reassuring others that you are well prepared for all eventualities, you will be in the best possible position should any risks become reality.

There is the maxim that if you fail to plan you should plan to fail and, unfortunately, this will often prove to be the case if you don’t have a sound risk management strategy in place. It really is worth taking the time and making the commitment to create one at the outset of any project if you want it to reach the right conclusion.