1 9-En

STELLA BACHTIS: Risk management is always
related to a specific context.

In a project setting, for example,
the context of risk management relates
to the stages of the project management life cycle,
being initiation, planning, execution, closure,
and monitor and review.
The risk management process should
be applied as early as possible in the project life cycle,
so that risks are identified, assessed,
and appropriate responses developed
before moving to execution.
ANTON JORDAAN: Let's now take a closer look
at the risk management process.
Our risk management canvas has six segments.
Each segment represents a stage of risk management.
The monitor and review stage is shown as a continuous activity
throughout the process.
We start with an overview of each stage
and highlight key issues that will inform and enhance
managerial decisions.
The first stage of the risk management process
sets the context and specifies objectives.
Being the first stage, it is vital
that there is absolute clarity on the context
in which the risk management process is to be applied.
This is followed by specifying key objectives to be achieved.
The two key questions to be addressed
are, first, what is the context?
Consider that the process can be applied at the strategic,
operational, departmental, or functional level within
an organisation.
In this course, we will apply the process to a project
management setting.
Once the context has been established,
we can develop and agree on the objectives specific
to our project.
Second, what are the key objectives?
You may recall that we defined risk
as "uncertainty on the achievement of our objectives."
Therefore, it stands to reason that before identifying
the types of risk or uncertainty we may be faced with,
we first have to determine and agree
on the project-specific objectives.
Once the objectives have been specified,
we can move to the second stage of the process.
STELLA BACHTIS: Risk identification
considers the types of risks or uncertainties
that may impact on achieving our set objectives.
Identifying a range of possible risks
takes practice and experience.
Brainstorming is a common technique that is used,
and it may be beneficial for you to consider
different categories or types of risk
to consult with your team and other stakeholders.
Key questions you will need to consider in this stage are...
How will you identify risks to objectives?
What categories will be used?
and What are the cause and effect
of risks on your objectives?
ANTON JORDAAN: Step three of the process
requires us to assess the risks that we
have identified in stage two.
For each and every risk identified,
we now have two further questions to consider.
The first question you need to ask
is, what is the likelihood of this risk actually occurring?
The next question then moves to thinking
about the possible consequence to your project objectives
should the risk occur.
A combination of both the likelihood and consequence
discussion then enables an initial risk assessment
to be performed.
A number of tools have been developed
for this type of qualitative risk assessment, often referred
to as the risk assessment matrix.
This is something that we will illustrate further
in the coming sections of the course.
Key questions that you will need to consider in the risk
identification stage are...
How will you assess likelihood and consequence of each risk?
How would you determine the overall risk level?
and...
Are there any existing controls in place?
STELLA BACHTIS: Now that we have concluded our risk assessment
stage, we will need to decide how to respond
to the assessed risks.
For example, what type of actions do you believe you
would need to adopt in order to minimise threats and maximise
opportunities to your project's objectives?
The focus is therefore about finding
ways of reducing the negative risks,
leveraging the positive risks, or simply accepting
the risks in an informed manner.
Key questions in this stage include...
What response options will you consider?
What additional resources will you require?
Who will be responsible for managing and implementing
risk response?
and...
How will you document the outcomes?
ANTON JORDAAN: The next step, and arguably
the most important step throughout the risk management
process, is communicating.
Communicating the identified risks and responses
to your team and stakeholders underpins
the successful management of the risk management process.
Communication needs to occur regularly, openly,
and formally, to ensure that all stakeholders are
aware of the risks and planned responses.
Open and honest communication further
allows for all stakeholders to be involved
in the risk management process and offer input
where necessary.
Key questions include...
What do I need to communicate?
To whom do I need to communicate?
and...
What strategies can I use to communicate?
The final stage of the process is that of monitor and review.
STELLA BACHTIS: As you can see, we
have placed monitor and review as
a continuous circular activity that
occurs at each stage throughout the process.
In doing so, we highlight the importance
of monitoring and reviewing risk management throughout the life
cycle of the project as well.
Things will change as you move through the project life cycle.
Therefore, to be effective, the risk management process
must remain dynamic.
Key questions you will need to consider when monitoring
and reviewing the process, include...
What are the timelines I need to consider?
How often do I review and revise the risk work undertaken?
How effective is our risk management strategy?
How effective is a risk identification process?
How accurate and effective is risk assessment?
Have risk response methods been effective?
What records do I need to keep?
and Are safety procedures being followed?
ANTON JORDAAN: To conclude, it is clear
that risk management is a standardised process
and, therefore, can be applied in a number
of different contexts.
Application of the process in a project setting
is not only essential, but it also
requires early adoption and continuous review
and updating throughout the entire project life cycle.

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STELLA BACHTIS: Risk management is always

related to a specific context.

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