Risk management is an important activity for protecting projects from disasters. Risk management is not a single task, it is ongoing. The most important activity in risk management is risk identification. In this blog post, you will gain an overview of the methods you can use to identify risks.
Risk management is an ongoing process
Risk management occurs not only once in a project, but again and again, depending on its complexity and duration. In the following diagram, you can see the activities that belong to the risk management process. These form a closed circle. Risk management planning is outside of this circle because it is created at the beginning of the project and adapted as needed. It will be picked up again from time to time, for example, if there are questions regarding risk management in the project or if a new employee starts to work on the project and has to be trained.
The most important step in risk management is risk identification, because only risks that are identified can also be analyzed and dealt with. Ongoing communication is a central element of the risk management process and is constantly in use. That’s why communication is not a stage in the circle, it’s in the middle. If risks are communicated and kept in mind, then they will automatically be reduced.
Methods of risk identification
Many methods can be used for identifying risks, some simple and some more complex. Unfortunately, normally only one method is used for identifying risks: checklists. The advantage of checklists is that they don’t interfere with work, but there is a smaller yield of relevant risks. It is necessary to implement different methods and information sources to discover as many relevant risks as possible. Every method provides a different point of view on a subject. The possible methods for identifying risks span from formalistic methods to intuitive ones.
Proven risk identification methods are:
- Document analysis and historical diagrams
- Evaluation of risk lists and lessons learned from similar projects
- Brainstorming with the project team and experts
- Interviews with professionals and other project managers
- Brainwriting with the 635 method, for example
- The Delphi technique
- Risk checklists with risk categories and risks
In the following, I will give you an overview of risk identification with brainstorming. From my point of view, that is the most important method and you can use it multiple times during the project with the team, but also with groups of professional experts, for example.
Identify risks with brainstorming
You have probably already worked with brainstorming. This method is widely used and has been successful in many businesses. If you are not familiar with brainstorming yet, here is a short introduction:
Brainstorming is a creativity method for developing ideas in a group. Its essential characteristic is the collection of as many spontaneous utterances in response to a particular question or problem as possible. The advantage of brainstorming in a group is mutual stimulation of all participants; a disadvantage is that the group will focus too quickly on a certain area. After collecting ideas through brainstorming, you have to sort the risks into further steps and roughly evaluate them.
Think you know brainstorming? There might be a few points that you haven’t noticed yet. The following procedure might offer you some more tips. As a project manager or a moderator, you should be well-prepared so that you can work more efficiently.
- Decide who should be at the brainstorming session. It might make sense to have multiple sessions with different people, e.g. with the project team, stakeholders, end user or developers.
- Find two scribes, because it’s hard for one person to write down everything at such a fast pace. A second person can make sure that all ideas are recorded completely and correctly.
- Instruct the scribes to write largely on a flipchart, or better yet on pin-up board cards, and make sure the text is big enough.
- Tell the participants, “The goal of this session is to think of a lot of risks in a short period of time. Don’t evaluate your ideas, let your thoughts run free. The risks can also be utopian. Don’t evaluate other people’s suggestions.”
- Ask for risks to the whole project.
- Ask for risks to particular topics or project phases.
- Group the risks according to similar categories, either in the session or afterwards.
- Note who suggested the risk. If something is unclear, then ask. The risk should be described specifically and should be easy to understand for everyone.
- Describe the risks in cause – risk – effect
If brainstorming doesn’t provide any more risks after a certain amount of time, ask the following questions and imagine some other risks that might threaten your project.
What might cause…
- Your project to last longer?
- Your project to cost more?
- Your product to not perform as expected?
- Your project to be cancelled early?
- Your project to not make the amount of money expected?
- Your project to negatively influence customer satisfaction?
- Your project to impair the image of the business?
Advantages and disadvantages of brainstorming
Brainstorming has a lot of advantages. You might already be familiar with a few of them. But you should also be aware of the disadvantages of brainstorming and keep them in mind.
Advantages of brainstorming
- Many participants already know the rules of brainstorming.
- Lots of risks can be recognized quickly.
- One idea inspires the next.
- Participants need not be afraid that their ideas will be evaluated during the session.
Disadvantages of brainstorming
- Not everyone actively takes part in brainstorming. Some participants are more quiet and don’t like to speak spontaneously in groups.
- Other participants speak too much.
- Some participants need longer to understand the theme and can’t immediately provide ideas.
- It’s not possible to cover all risks with brainstorming.
- The results of brainstorming are largely groupthink and not necessarily individual thoughts or ideas.
Risk pin-up board cards increase efficiency
In the following diagram, there is a template for pin-up board cards which have proven extremely useful in risk identification. With these practical cards, which are tailored for risk management, you can increase your efficiency later on in qualitative and quantitative risk analysis. These cards provide all necessary information for analysis and planning at a glance.
Brainstorming is one of the best methods for identifying risks, but it should not be used alone. At the beginning of the project, have a big brainstorming meeting with the project team and the stakeholders to create an initial risk log. During the project, you can continually identify new risks with short five to ten minute brainstorming meetings. That is the first and most important step to protect your project from disaster. Wishing you successful projects with this technique!