Risk is an uncertain event or set of events that, should it occur, will have an effect on the achievement of objectives. A risk is measured by a combination of likelihood of a perceived threat or opportunity occurring and the magnitude of its impact on objectives.
When planning an event or project, there will always be uncertainties. These are the possible issues with plans that you identify. Out of these uncertainties you get threats (risks) to your organisation / event, and opportunities.
An effective Risk Management Process should involve the following steps:
Identify the risk or opportunity, producing a Title and Description, with the Project(s) and Department(s) that it might affect.
Assess the likelihood and impact of this event happening, and assign an Impact Type.
Plan how to deal with and manage the risk or opportunity. You can write up detail here in the Additional Info field. The strategy for how to deal with the risk can be assessed using the Strategy field. This becomes a headline flag for how to deal with the risk during its lifecycle. The possible Strategies are:
Avoid: remove the risk entirely;
Exploit: make the most of the possible opportunity;
Mitigate: take action now to diminish impact of a risk if it becomes an issue;
Insure: pass the risk on to a third party (i.e. insurance);
Share: spread the risk or opportunity amongst a supply chain;
Contingency: develop a fallback plan that can be enacted in case a risk becomes an issue;
Accept: organisationally agree that no more action can be taken. This can happen instead of fully closing out a risk.
Action steps are then planned to back up the chosen strategy.
4. Implement the actions, by assigning a risk owner (responsible for managing, monitoring and controlling the risk) and action owners (for each individual action).
5. Communicate around the progress of the risk or opportunity, with regular reporting, notifications to owners, subscribers, project managers and risk managers, and linking the risks to the projects and / or tasks that they affect.
Next, check out our more conceptual article on building a risk management approach.