Hello, and welcome back. Hopefully, you're beginning to notice how important it is to plan for risks. Even the simplest projects can carry some kind of risks. Remember, those risks shouldn't deter you from pursuing the project's goals. The key is to be prepared. Let's discuss tools and techniques you can use to identify risks, including brainstorming and risk assessment. Brainstorming is one of the most effective techniques for identifying risks with the team because it allows groups to spontaneously share ideas without judgment. As a project manager, you will be responsible for bringing a group of people together to imagine potential risks. Have your RACI chart at the ready to refer to when you decide who to invite to this meeting. Speaking from experience, the best team for this task is a diverse one, which includes individuals from various roles, backgrounds, and experiences. Diverse teams bring different perspectives, experiences, and skill sets, and this may help you to identify risks that you may not have thought of on your own. For example, one member of your team might have experience working on multiple projects, while another newer team member, might bring a fresh perspective from their previous experience on other teams. A great tool that you can use during brainstorming is called a cause-and-effect diagram, also sometimes known as a fishbone diagram. Cause-and-effect diagrams show the possible causes of an event or risk and are very useful at risk management. For example, in the diagram seen here, the effect listed is a supplier missing its deadlines. This is a risk to your project. On the left, you'll brainstorm potential causes that would lead to the effect, like poor delegation or a lack of tracking tools. In other words, cause-and-effect diagrams can help identify all the ways that things could go wrong by identifying a potential risk, known as the effect, and working backwards to consider the potential causes of that risk. By categorizing and breaking them down into further causes, you are able to identify areas that could lead to a potential problem, like exceeding your budget or allowing scope creep to impact your timeline. As a reminder, scope creep refers to changes, growth, and uncontrolled factors that affect the project's scope at any point after the project begins. During these brainstorming sessions, you might find that your list of potential risks is quite long, and that's okay. It is a reality you and your team cannot account for every single problem that can occur during your project. So how do you decide which risks to focus on? List the outcomes from the brainstorm in a risk register. A risk register is a table or chart that contains your list of risks. Next, you will adopt a risk assessment technique. Risk assessment is the stage of risk management where qualities of a risk are estimated or measured. By qualities, we're mainly referring to how likely the risk is to occur and its potential impact on a project. We'll come back to this point in a moment. There are a few ways to assess risks, but one we'll focus on is creating a probability and impact matrix. A probability and impact matrix is a tool used to prioritize project risks. I personally love this technique and use it all the time in my role at Google. Earlier, I mentioned that you need to assess the likelihood that a risk will happen and its potential impact. This matrix will help you do just that. To create a probability and impact matrix, you will need to think about the level of impact. Impact refers to the damage a risk could cause if it occurs. Impact is also determined on a scale of high, medium, and low. High means that if the risk occurs, it will substantially alter the project. Low means if the risk occurs, it will have a slight impact but it's not likely to derail the project. You will also need to think about probability. Probability is the likelihood that a risk will occur. We also determine probability on a scale of high, medium, and low. In this case, high probability means there's a high likelihood of this happening. Low probability means you've identified a risk that could happen, but it isn't likely that the risk will occur. These two considerations come together to determine the inherent risk rating. Inherent risk is the measure of a risk calculated by its probability and impact. Measuring the inherent risk gives us a method for understanding a risk. Inherent risk is also determined on a high, medium, and low scale. Basically, if a risk has a low impact and low probability, it has a low inherent risk rating. These are the types of risks you don't need to worry too much about. But if a risk has a high impact and a high probability, then it carries a high inherent risk rating. Medium to high risks are the risks you should focus on and create detailed mitigation plans for. When you're creating a probability and impact matrix, it's important to ensure you create a matrix that meets accessibility guidelines and has information and formatting that everyone can easily and quickly understand. One way to do this is to use both color and distinct shapes or text to communicate levels of risk. You can learn more about accessibility communication by visiting course resources. The way you view and manage each risk will be determined based on your organization's risk appetite, which refers to the willingness of an organization to accept the possible outcomes of a risk. You, your team, and your stakeholders may have different appetites for each risk. We'll discuss how risk appetite plays into risk mitigation in just a bit. Certain low-level risks that could result in minor setbacks are much more tolerable than high-level risks that have the potential to completely derail your project. Once you've completed your risk assessment, you will update the risk register to include high, medium, and low ratings for some examples of risks that you've identified for this project. Great. Now that we've covered how to identify and assess risks, we'll go on to the next video, where we'll discuss some of the types of risks you'll run into during your role as a project manager. Meet you there.
