Risk Identification

Learn the FASTEST way to Identify Risks! Risk Identification is the process of identifying risk. The fastest way to identify risks is to ask six (6) simple questions. You can then follow up by using a risk checklist, PESTLE and other risk identification techniques.
Risk Identification is the process of identifying risk. Risks can be threats to a business or project or opportunities for a business or project stakeholdermap.com
Before we review the six (6) questions for identifying risks, there are some key points that you need to know about risk......

Everything that we do has some element of risk from travelling to work to building a skyscraper or arranging a deep sea expedition. All businesses have risks and all projects have risks.

The problem is that risk identification is often not done well or is not done at all. I have seen project risk registers with no risks or with every risk closed - all likelihood or impact having apparently been reduced to zero.
Remember Risks are not inherently bad and the presence of risk IS inevitable. stakeholdermap.com
It is the task of managers and project managers to identify and manage risks, so what is the FASTEST Risk Identification approach?

Techniques for identifying risk

Risk Identification

Six (6) Simple questions to identify risks

Perhaps the simplest and fastest way to identify risks is to ask your stakeholders, project team, Project Board, operations team etc some simple, open questions:

  • What could go wrong?
  • What could prevent this from happening?
  • What can harm us?
  • What is the worst case scenario?
  • What threats do we face?
  • What opportunities could we find?

It is worth asking these questions:
  • before, during and after the project or initiative
  • while reviewing each stage of the project life-cycle
  • while reviewing key project documentation:
  • At the start of each project stage or phase

Use PESTLE to find risks

Once you have answered the six (6) questions review the headings below and Ask "what threats or opportunities could we face?"
  • Political
  • Econonmic
  • Soci-cultural
  • Technological
  • Legal
  • Environmental

Identify risks from those who have gone before

Although projects are about change so often attempting something new, there is plenty of useful information and knowledge available from people who have 'gone before' for example you can:

Use this checklist to identify common risks

Common Project Risks - The Idiots Guide to Project Management includes a useful checklist of risks that can apply to all projects. The list below is based on their suggestions:

Risk identification checklist

  • Funding: will it be enough? are some areas under-estimated
  • Time: delays may happen, deadlines may change, deadline might be fixed
  • Staffing: availability of skills, availability of key people, loss/reassignment of staff
  • Customer relations: customer availability, knowledge of customer resources, customer maturity
  • Project size and/or complexity: large and complex projects can be difficult to plan, monitor and control.
  • Overall structure: Is the project organization clear? Is it clear who has accountability? Are reporting lines clear?
  • External factors: new regulations, market changes, changes in technology, changes in regulatory funding or processes.

Common Business Risks include:
  • Market acceptance,
  • Time-to-market,
  • Incompatible product fit,
  • Difficult-to-sell and
  • Loss of political support.

Review common reasons for project failure

Research has shown that there are common reasons for project failure regardless of industry or project type. These are a good source for risk identification as it is likely that some or all of them will be potential risks on your project.

Top Reasons Projects Fail. Rita Mulcahy, RMC—Project Management

Top 10 Reasons Why Projects Fail. BY JIM STEWART · NOVEMBER 7, 2015

Why Projects Fail. Cranfield School of Management, article in www.pmtoday.co.uk.

Do we have too many risks?

Long lists of risks are not necessarily a cause for alarm, in my experience as a project manager in the IT industry, risk identification is often haphazard and there is a certain embarrassment in identifying and raising risks - "will they shoot the messenger?". I suspect that 90% of projects don't identify anywhere near all of the risks and most ignore opportunities all together.

That said, once risks are identified it is the task of Risk Assessment to analyze each risk and take a view as the viability of a project or enterprise. For more on this see risk management guidelines and risk responses.

Risk Identification - references and further reading

Baker, S and K. (2000) The Complete Idiot's Guide to Project Management, alpha books.

Bradbury, D. and Garrett, D. (2005) Herding Chickens: Innovative Techniques for Project Management, Harbor Light Press.

Cranfield School of Management. 2014. Why Projects Fail [online] Accessible at: https://www.som.cranfield.ac.uk/som/dinamic-content/executive/documents/WhyProjectsFailPMtodayMarch2014.pdf.

pmpvizsga.blogspot.co.uk. 18 Reasons Why Projects Fail. Rita Mulcahy. [online] Accessible at: pmpvizsga.blogspot.co.uk/2013/10/18-reasons-why-projects-fail.html [Accessed 13 May 2017].

project-management.com. Top 10 Reasons Why Projects Fail. BY JIM STEWART NOVEMBER 7, 2015. [online] Accessible at: https://project-management.com/top-10-reasons-why-projects-fail/ [Accessed 13 May 2017].

Bruce, A and Langdon, K. (2000) Strategic Thinking (DK Essential Managers), Dorling Kindersley

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