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As a project manager or staff member, you handle risk each day; it's one of the crucial necessary things you do. When you discover ways to apply a systematic risk administration process, and put into action the core 5 risk administration steps, then your projects will run more smoothly and be a positive experience for everybody involved.

A typical definition of risk is an uncertain occasion that, if it happens, can have a positive or negative effect on a project's goals. The potential for a risk to have a positive or negative impact is a vital concept. Why? Because it is natural to fall into the trap of thinking that risks have inherently negative effects. If you're also open to those risks that create positive opportunities, you can make your project streamlined, smarter and more profitable. Think of the adage - "Settle for the inevitable and turn it to your advantage." That's what you do when you mine project risks to create opportunities.

Uncertainty is on the heart of risk. It's possible you'll be uncertain if an occasion is likely to happen or not. Also, you could be uncertain what its penalties would be if it did occur. Likelihood - the probability of an occasion occurring, and consequence - the impact or final result of an occasion, are the two components that characterize the magnitude of the risk.

All risk management processes follow the same 5 basic steps, though typically different jargon is used to describe these steps. Collectively these risk management steps combine to deliver a simple and efficient risk administration process.

Step 1: Identify. You and your crew uncover, recognise and describe risks that may have an effect on your project or its outcomes. There are a number of strategies you should use to search out project risks. Throughout this step you start to organize your Project Risk Register.

Step 2: Analyze. Once risks are recognized you establish the likelihood and consequence of every risk. You develop an understanding of the nature of the risk and its potential to have an effect on project goals. This information is also input to your Project Risk Register.

Step three: Evaluate or Rank. You consider or rank the risk by determining the risk magnitude, which is the mix of likelihood and consequence. You make selections about whether or not the risk is settle forable or whether or not it is severe enough to warrant treatment. These risk rankings are also added to your Project Risk Register.

Step 4: Treat. This can also be called Risk Response Planning. Throughout this step you assess your highest ranked risks and set out a plan to deal with or change them to achieve acceptable risk levels. How can you minimize the probability of the negative risks as well as enhancing the opportunities? You create mitigation strategies, preventive plans and contingency plans in this step. And you add the remedy measures for the highest ranking or most serious risks to the Project Risk Register.

Step 5: Monitor and Review. This is the step where you take your Project Risk Register and use it to check, track and overview risks.

Risk is about uncertainty. If you happen to put a framework around that uncertainty, then you definately successfully de-risk your project. And which means you'll be able to move much more confidently to achieve your project goals. By identifying and managing a complete list of project risks, unpleasant surprises and obstacles can be reduced and golden opportunities discovered. The risk management process additionally helps to resolve problems after they occur, because these problems have been envisaged and plans to treat them have already been developed and agreed. You keep away from impulsive reactions and going into "fire-fighting" mode to rectify problems that might have been anticipated. This makes for happier, less burdened project teams and stakeholders. The top result's that you decrease the impacts of project threats and seize the opportunities that occur.

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