How to Use a Risk Assessment Matrix for Project Management

96% of startups fail before they get to the ten-year mark, according to Inc.com. In most cases, their failure trickles down to one vital question; what could go wrong? Those who look for answers to this question early enough manage to protect their business from common risks and create the best atmosphere for its growth.

Risk assessment should be done to the intricate parts of your business, such as project management to ensure the success of the entire company. By having a clear picture of your entire project’s risk landscape, it becomes easy to dedicate resources to the respective business threats. With a risk assessment matrix, you can not only rank threats but also identify the kind of resources you need to dedicate to them.

Here is how to use a risk assessment matrix to improve the success of your project:

Start With Project Risk Identification

What threats await your project? The idea is to brutally identify any obstacle that stands in the way of success. You can start by looking at how other projects fared in the past and identifying the barriers to their achievement.

If your current project isn’t related to those of the past, look for ways to foresee the threats that lie ahead. For instance, you can approach professionals in your industry to get insights. Additionally, you can conduct market research, historical studies, or even brainstorm imminent threats.

Analyze the Threat

While some threats have the potential to maim your entire business, others will barely make any impact. Try to understand the kind of impact that a risk can have and any possible remedies. You can dedicate a team to deal with risk analysis and identifying common issues.

They should be thorough enough to identify common ways to eliminate the risk, the impact it might have, and how this all relates to your organization’s resources. This might also be the best stage to create a risk assessment matrix.

Why Using a Risk Assessment Matrix Matters

With limited organization resources and barely enough time to deal with all threats at the same time, it is essential to learn how to prioritize your project’s risks. A risk assessment matrix can help you rank the risks by multiplying the probability of a threat occurring with the impact that it can have on your business.

The figures that you get can help you have a great idea on what needs more attention than the rest. This can be quite helpful when you have to forward your risk treatment options to the executive managers for approval.

Picking the Right Risk Treatment Method

The best risk treatment option for your business will depend on your risk appetite and the resources at your disposal. Ideally, any project management risk that might take more than what you have to deal with should be transferred to a business that is more adept at dealing with it. For instance, you can outsource the task of cyber security to a better-prepared firm if your business isn’t ready to handle it.

However, if the risk is still too large, try and avoid it altogether. For risks that you can manage in-house, look for ways to tone them down. Lastly, any risk that might be too minute to make an impact on the success of the project should be ignored. It might not be necessary to deal with such risks.

Employee Training Matters

For risk management to be successful, every employee needs to be aware of the role they play in dealing with project risks. Once you pick the best risk treatment option for the project at hand, you should embark on employee training. For instance, you can train employees on the log monitoring best practices they need to stick to in order to eliminate the risk of a cyber-attack.

However, your choice of training methods is equally as important as the content itself. Instead of sticking to the conventional PowerPoint training sessions, improve the sessions through using strategies such as micro-learning and gamification. The more engaged employees are during the training sessions, the higher their success rate will become.

Monitor and Update the Risk Treatment Policies

With time, your project’s risk landscape is bound to change, and so might your orientation towards risk. The level of resources at your disposal might change with time, and you might come across new barriers along the way. The sooner you make the necessary tweaks, the better. Ideally, the best option is to allocate the role of monitoring risks to someone on the project to ensure that you have enough visibility into it.

Comfort zones are a project’s recipe for failure. The moment you decide to take a risk, the rewards are bound to multiply, increasing the success rate of the project. Be sure to integrate project management with a risk matrix to improve the success rate of the project.

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