Risk is a natural part of life. It doesn’t matter what you’re doing, there is always at least some risk involved (and we’re talking about everything from brushing your teeth to wrestling alligators).
The same holds true for businesses. However, even though there is always risk involved, you can still have a successful project by using proper risk control measures. Risk assessment is a critical part of project management and helps determine whether or not you can (or should) risk the risk.
What is risk assessment?
Risk assessment in project management is a qualitative and quantitative measure used to identify potential risks, figure out the likelihood of the risk happening, and how those risks might impact your project. While risk assessment isn’t designed to help you avoid risk, it can help you decide whether or not a risk is worth it and come up with a further action plan to help mitigate said risks.
A risk is defined as anything that could potentially happen that affects the desired outcome of a project or affects the people, processes, technology, and resources used in a project.
What is a risk assessment template?
A risk assessment template is one of the most practical risk management tools because the template gives you a process to follow for assessing any potential risk that comes up during your project.
Using this risk assessment template also allows you to have increased visibility to see the risks across projects and accordingly allocate resources to projects that need them the most, based on the probability and impact of the risks.
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Launch Monetization Ecosystem
Release alpha version of product
Create back up system
develop separate launch plan
Setup team of developers to fix bugs onsite
Create a system for engineers to address a crash
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Why does a business need to conduct project risk assessment?
You may consider using a risk assessment template if your team is...
Repeatedly running into the same problems
Having trouble identifying risks ahead of time
Or needs to be aligned on an action plan to mitigate risks
Risk assessment is a critical part of your workflow. Let’s look at exactly how a risk assessment helps your business.
Being proactive by identifying a risk and being prepared for it is the best way to set your project up for success. Sure, that means you could be worrying about something that may not even happen. But if the risk does happen then you’ll have a plan in place to mitigate the risk. Instead, if you’re stuck in a cycle of reacting to problems after they happen, you’re never going to get ahead of potential risks in your business and it’s always going to feel like you’re playing catch up.
Similar to being proactive, conducting a risk assessment allows you to be accountable when things go wrong. Rather than scrambling to try to explain why something suddenly went wrong to a stakeholder, you can easily say, “As we discussed, xsituation happened. Luckily, we have a plan in place to deal with this exact scenario.”
It doesn’t matter how bad the risk might be, if you have a plan to address the risk you’re showing your stakeholders that you are prepared and care about positive outcomes.
People don’t like hearing about risk, but they do like hearing that you are prepared for all the possible scenarios. Running a risk assessment at the beginning of your project allows you to be transparent with your stakeholders and show them what might happen throughout a project.
Showing people what could go wrong may be seen as a bad thing, but by showing them that you have a plan in place to mitigate risk (as risk is almost always inevitable), you’re increasing confidence. It is better to show your stakeholders that you are proactively managing risk, rather than reacting after the fact.
There are few things that improve collaboration better than having plans for everything, including risk. We’ve all been in situations with people who are flying by the seat of their pants, dealing with the various problems as they come up, rather than having a plan for things.
Conducting a risk assessment will help you better collaborate to manage those moments where you encounter an identified risk, so everyone can get back to work faster.
How to do a risk assessment in 5 steps using this free template
Running a risk assessment can be quick if you know the steps and have the right risk assessment tools.
on this page. As defined above, risks are anything that could potentially impact the outcome of a project. Capture everything that could happen regardless of how far-fetched the risk might seem – the more risks identified, the better prepared you’ll be.
Click the Add risk button, to add risks and then identify their Related Projects in the
Step 3: Determine the likelihood of the risk happening, and assess the risk
Once you’ve identified the hazards and potential risks within a project, rank the risk based on how likely it is to happen and rank the potential impact of the risk. For each risk you identify, think about the impact on your business, customers, and stakeholders.
table. In this table, team members are also allowed to Vote on action ideas they like, and give Feedback on action ideas to increase collaboration and transparency.
Step 5: Document everything
As always, the more you document, the better off you’ll be. This doesn’t just mean taking notes during the previous steps. The goal of a risk assessment template is to almost create a record, or manual, for how to handle each kind of risk you may encounter during a project. Your teammates can reference what has worked, what didn’t work, and whether or not your assessment was accurate.
In the final step of the risk assessment template, the
No. Risk can be both good and bad. While the definition of risk tends to have a negative connotation, some risks can be beneficial for businesses because they can provide new opportunities or even yield higher returns in some situations. Learn more about risks in this doc on
Coda is an all-in-one doc for your team’s unique processes — the rituals that help you succeed. Teams that use Coda get rid of hundreds of documents, spreadsheets, and even bespoke apps, to work quickly and clearly in one place. This template is a Coda doc. Click around to explore.