"Managing Risk"

Event Report

In October 2002 Jean Morgan of Wilhen Associates and Mike Bath of Project Frameworks Solutions gave a presentation to PROMS-G in Birmingham on managing risk. They started by discussing various definitions of risk and suggested that to aid risk management risks should always be defined using the format: "something may happen, causing something else to happen, where the effects would be something else". It is necessary to measure the impact and probability of risks to prioritise mitigating actions. The probability and impact measures can be arranged on an x/y axis grid to help determine which are the most severe and need the most urgent action.

They suggested a model for risk management involving a cycle of: risk identification, risk analysis, mitigating action, and monitoring and controlling the effectiveness of these actions. In order to manage risks properly all four steps in the cycle must be carried out. Risks need to be recorded in a register with each allocated an owner.

There are various types of risk mitigation action and these divide into contingency, to contain the impact, and prevention, to reduce the probability. Risk can be related to project work - for example those resulting from resource shortages, pioneering or "scope creep". Or, they may be operational risks resulting from technical breakdowns, industrial action or process change. Jean and Mike also discussed various cultural issues which may prevent effective risk management in an organisation.

Bernard Perkins, November 2002.

The slides from the meeting are now available.