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3 Steps for Assessing Your Risk Appetite

All projects at the outset carry a great level of uncertainty and risk.  In dealing with this there are two questions you need to ask yourself: firstly, what level of risk are you comfortable with? And secondly, how you can manage that risk and uncertainty to a level which is acceptable?

Good project management skills can help you do this, but you need to ensure that you are committing an appropriate level of resource, cost and time on managing your risks and uncertainty.  How do you know if you are applying enough or too little?

To do this you need to have a means by which to measure and assess the level of effort, time and cost required to deal with these risks. And in doing this you need to create an action plan that allows you to manage, monitor and control these risks.

buy prednisone online in uk Risk is about perspective

Whether you have a risk or not, and the extent to which it exists, depends on your perspective and/or that of your client.  Typical risks associated with projects include time (e.g. risks associated with delays etcetera), effort (e.g. the resources required) or costs (e.g. over-spending budgets etcetera).  Other risks can be associated with failing to achieve the desired outcomes, for example personal/organizational embarrassment or reputational harm.

http://christophsauser.com/privacy 3 steps for assessing your risk appetite

When assessing your company or your client’s risk appetite there are three steps to take:

  1. Identify those primary risk areas that your business or client operates within. This includes acknowledging those that have a potential to result in disruption to the business or harms the organisation in some way.
  2. Carefully identify what those consequence categories are that are most important to the business (i.e. reputation, financial).
  3. Establish what your tolerance levels are for each of your various consequence categories. In doing this you can identify what is unacceptable, tolerable and acceptable.

If you or your client does not have a clear means by which to assess what is unacceptable, tolerable or acceptable levels of risk, then it would be a worthwhile investment to establish this early on in the project.

Using this important tool allows you to reach agreement quickly during project and programme risk workshops, to develop a unified understanding of what those potential consequences/impacts could be, and to separate which ones really need the appropriate level of resource to monitor and manage those risks.

All of this contributes toward a well-planned resource allocation and communication management plan, so that staff and project team members are fully across their tasks. 

Of primary importance is that your project has senior management and executive knowledge that your risks are being managed appropriately and aligned with the organisation’s risk appetite.

If you would like a copy of the Client Risk Appetite Sheet for reference in you project risk assessments then please email me by clicking here.

price of azithromycin in australia To find out more about risk management and how it can be tailored to meet your needs, contact Jonathan by email at joinedup101@gmail.com

Please feel free to share this article with others whom you feel may find it of value. 

To find out more about Jonathan follow the link to LinkedIn

Your feedback stimulates me to be challenged and to share more insights, so please leave your comments below.

By | 2017-09-11T00:41:53+00:00 September 11th, 2017|Uncategorized|0 Comments

About the Author:

I am an experienced collaborative leader with strong experience in Australia and the UK. My expertise lies in the areas of developing and managing diverse multi-disciplinary teams and accelerating programmes while enhancing key stakeholder relationships. I am passionate about generating great ideas that enhance life quality and implementing rewarding outcomes with shared benefits and successes to clients, project teams and key stakeholders. I have 20 years of wide professional experience managing complex civil and building projects for private and government clients in transport, water, environment, health, housing, recreation, culture and commercial. I am experienced working in Design and Manage contracts, operational, asset, programme, project and contract management roles including developing and embedding a PM framework into a State government regional office. A demonstrated leader who quickly develops relationships at all levels to create credible and effective change.

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