Risk management in project management – types, process, tips & tricks

The project management industry is changing at a rapid pace. The arrival of new competitors and advanced technology has brought some considerable changes. While these shifts have eased the way project managers achieve their targets, it has also increased the risks that come along.
A small tower of red bricks labelled Plan, Evaluate, Control, Review and Assessment. In the middle, a wood-coloured brick with the inscription Risk. A man's hand is pulling out the Risk brick.
While project management becomes more dynamic and broad, companies need more educated and intelligent project managers who can tackle these changes.
If you aspire to become a project manager or already are on the path to becoming a project manager, you should know how to predict, prevent and respond to those risks.
Before anything else, let's have a look at the project risk management process. We have also listed a few steps and tips to help you manage the risks associated with projects.

What is risk management?

Despite the nature of any industry, risk management refers to identifying, assessing, and preventing the risks that can (potentially) harm the process or the goals. 
From a project management perspective, it is the responsibility of project managers throughout the project. To effectively manage risk, one should clearly understand the goals and the processes to identify the possible barriers that could harm the project or team's ability to produce results.

Types of project risk

Before we move ahead, let us understand the major types of risks that a project manager may encounter. Though there are hundred other types of risks that you may face, the ones we are listing are the most common, regardless of the nature of the project.
These common types of risk include:
  • Cost: These are the risks that are associated with the budget. This can include overspending the budget, errors in cost estimation, denials from stakeholders, etc. 
  • Schedule: This consists of risks like scope creep, delays, conflicts, etc. 
  • Performance: These are the risks associated with the progress and the quality of the project. Risks that cause inconsistent results in comparison to what was actually planned.
Once the project managers have identified the risks pertaining to the project, they begin with understanding these risks and their effects and try to reduce the impact.

Steps in the risk management process

To tackle these risks, project managers follow a risk management process which goes something like this:
Step 1: Identify the risks that can harm the progress of your project.
Step 2: Assign responsibility for identified risks to capable team members. Although project managers often take on this task only after a thorough analysis of the risk and its impact, it is better to assign responsibility early on.
Step 3: Now, it's time to analyse each risk to understand the driving factors and potential impacts fully. Be sure to evaluate the severity of each risk in the context of the overall project.
Step 4: Prioritise the risks based on urgency and the severity of impact.
Step 5: Have a brainstorming meeting with the team and plan a systematic approach to respond to the identified risks.
Step 6: Monitor how your team and the person in charge deal with the risk and take the necessary measures if things do not go according to plan.

Four tips to reduce and manage risks

However, sometimes it is literally impossible to eliminate some risks entirely, but there are ways to reduce the impact.

1) Have a solid risk management plan

Anyone who has enough experience in project management knows how important it is to always have a risk management plan even before starting the project.
An ideal risk management plan should be created taking into consideration the nature of the project, the skills of the team, time available, budget, etc.

2) Keep track of your risks with a “risk register”

Make a risk register which is basically a list of all potential risks that can harm your project.
Keep track of all the risks you have faced and responded to in the course of the project. Also, mention the risks that you were unable to detect initially. This will help you and your team to have a clear understanding of the progress of your project.

3) Follow a proactive approach rather than reactive

Project managers often take a reactive approach to manage the risks instead of a proactive one. It is crucial for project managers to react with flexibility when something unforeseen happens, but at the same time, it is also essential to step back and have a look at the project from a proactive point of view.
The project managers should always invest a decent amount of time in risk management to take preventive measures to reduce the impact and even the chances of risk events occurring. Planning beforehand is much better than trying to respond at the last moment.

4) Hone your project management skills

Above anything else, it is the skills of the project managers that save the project from turning into a disaster. Project managers should always stay up to date with the external as well as internal business environments, build up their skills, and keep learning new things constantly.


Managing the risks is a tedious task – there is no doubt about it. Sometimes even the most skilled project managers fail to handle some risks. So, it is important to have robust planning and execution of the risk management process. Along with that, maintaining a risk register is again a great way to keep track of all the risks revolving around the project.
Author: Ram Tavva, Senior Data Scientist and Alumnus of IIM- C (Indian Institute of Management - Kolkata) with over 25 years of professional experience specialised in Data Science, Artificial Intelligence, and Machine Learning. PMP Certified, ITIL Expert certified APMG, PEOPLECERT and EXIN Accredited Trainer for all modules of ITIL till Expert. Trained over 3000+ professionals across the globe Currently authoring a book on ITIL "ITIL MADE EASY".
Conducted myriad project management and ITIL process consulting engagements in various organisations. Performed maturity assessment, gap analysis and project management process definition and end to end implementation of project management best practices.

Keywords: Project management, Risk management, Tip, Guide

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