How to Track and Report Risks

November 8, 2016

Having a system in place that mitigates risk is just the start. Businesses need to constantly track the status and health of the risk management program if it’s to be capable of delivering the desired results.

Success and failure indicators need to be clearly defined, along with any triggers that are likely to precede an EH&S-related event. It’s much like a superhero’s ability to look into the future and enables risk management teams to put in place contingencies that prevent incidents from taking place.

It should always be noted that risk management never stops and exists for the duration of any project – be it a two-week affair or something that takes place throughout a company’s lifespan. It’s an ever-moving target, too, with certain risk attributes – such as impact and probability – liable to change during the project.

Broadly-speaking, risk management includes the following activities:

At first glance, that may seem like a headache few project managers need on top of their daily list of duties, but when broken down, risk tracking and reporting is actually rather simple.

We’re going to look at how organizations of any size can track and report risks without the process for doing so becoming all-encompassing.

  1. Think ‘risk management’ throughout the project

Risk can only be controlled and mitigated if it is as the top of everyone’s minds throughout the lifespan of the project. Risk management should be embedded into the team from the start by making it the first item on every meeting agenda.

  1. Identify risks early

Once the scope of a project has been defined, the next task should be to identify potential risks. This demands an open mindset from everyone involved and is best conducted under the guise of a risk brainstorming session. You’ll never identify every single risk at this stage, but a collective effort will unearth the most prevalent ones before you get started.

  1. Remember: not every risk is negative

As counterintuitive as it may sound, you need to consider both threats andopportunities when it comes to risk management. Positive risks are those uncertain events that could be beneficial to your project or business. They may make the project faster and more profitable and should therefore be given just as much airtime as the negative risks.

  1. Clarify ownership

Armed with a list of risks, you can now make it clear who is responsible for tracking and reporting each one. Put people closest to the risks in charge of mitigating them and you’ll save a significant degree of stress further down the line. Ownership fosters accountability, and if everyone understands the role they play in reducing risk, fewer incidents should take place.

  1. Don’t treat all risks as equal

Some risks have a much higher impact than others. Showstoppers could completely derail your project while others are so dangerous they need special attention. Don’t treat all risks as being equal; you’ll occasionally have to go on gut feeling, but that’s fine – just use any prioritization measure you decide upon consistently.

  1. Define risk responses

If you know what the threats are, you can call upon three options to counteract them:

1) Risk acceptance (appropriate if the effects are likely to be minimal)

2) Risk avoidance (usually involves re-organizing the project to ensure the risk isn’t encountered)

3) Risk minimization (attempt to prevent risk by influencing its impact)

The route you chose depends largely on the type of risk at play, but clearly defining the response makes the process of risk reporting far easier as the project draws on.

  1. Maintain a risk log

If you follow the golden rules above, the prospect of maintaining a risk log shouldn’t be particularly arduous for those involved. It’s by far the easiest way to report risk and enables project stakeholders to track risks against their associated tasks and owners.

Wrapping up

By following the above rules, projects will be delivered on time, within budget and, most importantly, safely. As a result, team members will be happier as they swap firefighting for an assured, EH&S-focused approach to every project they undertake.

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