Every project carries an element of risk. Whether it’s scope creep or supply chain issues, looming roadblocks threaten to sidetrack even the best-planned initiatives.
To manage a smooth and successful project, you must find a way to mitigate risk before problems come knocking. But how can you know what to prepare for?
Set your next initiative up for success by learning how and when to use a risk register. Implementing this tool during the project planning phase allows you to identify, monitor, and address potential threats before they impact your deliverables.
It’s an essential part of your project management toolkit — so don’t skip it.
What’s a risk register?
Managing risk is a standard aspect of project management. Risk registers, also known as risk logs, document potential threats to the successful delivery of a project. Aside from acting as your go-to primer for problem-solving, this document also reassures your team and stakeholders that you’re prepared to effectively manage risk and mitigate possible negative outcomes.
You begin by identifying, analyzing, and developing tangible responses to positive and negative risks before they manifest. Then, as you move through the risk assessment process, you assign priority to threats, determine the likelihood they'll occur, and establish responsibility for mitigation deliverables. These registries are helpful for any initiative that requires risk management, from new product launches to manufacturing processes.
Keep in mind that your risk register is a living document, and you should refer to it throughout the lifecycle of your project. As new threats emerge or risks become more likely due to changing circumstances, update the log and communicate the changes to your team so they can prepare.
When to use a risk register: 5 risky scenarios
So many external factors could impact the implementation of a new project. Data theft, communication breakdowns, and scheduling delays — to name just a few — can all result in on-the-fly reworks and missed deadlines.
No one wants to cope with these outcomes — the goal is an effective and on-time delivery. That’s why, big or small, every project needs a risk register.
That isn’t to say every risk log will look the same: the level of detail depends on the scope and complexity of the project. As the project manager or team lead, it's up to you to evaluate potential risk scenarios to determine the log’s parameters.
Risks come in all shapes and sizes. Some may even have a positive impact on your project. To organize a weighted list, rank risk scenarios as:
- Low priority: Communication and scheduling issues leave your project vulnerable to scope creep and pushed-back deadlines. These risks, while disruptive, are least likely to seriously derail your work and damage the end product.
- Medium priority: Unplanned or additional work can negatively impact your team’s understanding of project objectives and ability to meet deadlines. Though not as significant as high-priority risks, these roadblocks are more serious than low-priority items.
- High priority: These risks stand to harm your project the most. Prioritize anything that impacts your client’s bottom line, such as data security or theft.
Being aware of some of the more conventional threats will help you better prioritize and plan for their potential impact. Here are five common risks and their respective rankings:
1. Data security (high priority)
Any project affecting the integrity of your client’s data needs to prioritize security. Track and mitigate risks associated with business-critical information and customer data, which, if stolen, can significantly damage the organization’s revenue and reputation.
2. Theft (high priority)
If your project requires significant physical resources or your team operates remotely, you run the risk of material and time theft or reporting errors. Including a system to track inventory and employee resources as part of your risk mitigation can reduce revenue loss, improve productivity, and decrease uncertainty among internal team members.
3. Unplanned work (medium priority)
Unplanned work and scope creep are typical project challenges leading to missed deadlines and employee burnout. A risk registry helps you track additional assignments and trigger the change control process — a methodology to manage all change requests that affect the project baseline — to ensure all tasks are assigned correctly.
4. Scheduling delays (medium priority)
Your risk registry can remind you to establish and monitor timelines for scheduling errors and delays. Without a proper schedule, your team might confuse deadlines, leading to rushed, poorly executed work or missed deliveries.
5. Communication issues (low priority)
Project inconsistencies and missed deadlines are common consequences of poor communication between project team members. Your risk registry can identify where documents like the project plan and scope statement live and highlight communication channels your team should use to transmit vital information. You can also use this entry to establish a business case for creating a communication plan.
Risk register elements: What to include
Every risk log looks different, shaped by the unique threats presented by the project’s parameters, complexity, and length. But most hit the same marks and tracking fields.
Common tracking fields include:
- Identification: This entry might include the risk name, identification number, a short descriptive subtitle, and the dates you created and completed the item. Including these dates allows you to understand how long it takes to resolve an identified threat, information that stands to benefit your next project’s planning.
- Description: Include a brief, high-level description of the risk and potential impacts. Keep this entry short and sweet. Aim for a length between 80–100 characters.
- Classification: Label each risk based on the team it stands to impact. To determine the classification, evaluate the source of the risk and the appropriate team to solve it. Categories might include:
- Project plan
- Probability: Analyze your risks and score them according to the likelihood they’ll occur. For example:
- Very likely
- Not likely
Not every risk will become an issue, but preparing for each reduces the possibility of them occurring and allows you to organize a contingency plan. You should give “very likely” threats the highest priority and address them first.
- Impact: Create a five-point scale to evaluate each risk’s potential impact on your project. The scale, along with the probability rating, will help you assess priority. For instance:
- Very low
- Very high
Ensure the criteria for evaluating each risk are consistent across working groups.
- Mitigation: Depending on the complexity of the risk, this entry could include a high-level description of how to respond to the threat or point to an in-depth mitigation or risk response plan. You can house the mitigation plan within your project management software for easy reference.
- Priority: This entry considers probability and impact to clarify the potential of each risk to harm your project. “Very likely” and “very high impact” ratings place a threat at the top of the list for risk response development.
- Ownership: Determine who will be responsible for the delivery and execution of the mitigation and contingency plans. Ownership could belong to a single team member or an entire department.
- Status: Document if and when your team successfully implements the mitigation plan for each risk item. Status options include:
- Not started
- On hold
How to create a risk register
If you’ve never created a risk register before, this undertaking may feel overwhelming. Fortunately, it doesn’t have to be. You can effectively manage potential threats to workflow with this 4-step process to create a risk register.
To begin, create a risk register template using a spreadsheet application or project management software based on the elements above. Next, populate the document with the information you glean when you:
1. Identify risks
Using the project breakdown, identify risks for each phase. You can source much of the information you need from existing project documentation, such as the:
- Cost management plan
- Resource plan
- Project schedule
- Stakeholder analyses
Once you’ve landed on a rough list of risks, review the project’s strengths, weaknesses, opportunities, and threats (SWOT) analysis, environmental assessment, supplier information, and industry requirements as due diligence to validate your conclusions.
Add each identified risk to the first column of your spreadsheet.
2. Analyze risks
Conduct a risk analysis based on probability and impact. This can be either qualitative or quantitative. Consider working with business stakeholders to create a risk matrix that establishes standard rating categories to ensure consistency between project managers.
3. Plan risk response
When you complete the risk analysis process, work with the project teams and business stakeholders to determine ownership and develop mitigation plans.
4. Control risks
The project manager must actively manage the risk register throughout the project lifecycle. It’s their job to continue to track threats and upgrade or downgrade their priority in response to shifting circumstances. If a team member identifies a new risk, they must add it to the risk register, too.
Risk register example
Start with a simple risk registry template and add fields as necessary. The beginning of a complex registry could look like:
|001 - Shipping Delay||Ground delivery is delayed due to floods.||Schedule||Not likely||Medium||Determine the feasibility of shipping via rail instead of by road.||Medium||John Smith - Logistics||In progress|
|002 - Broken Machinery||Production delay due to machines needing repair.||Operations||Likely||High||Source backup machinery.||High||Jane Doe - Production||Complete|
|003 - Material Costs||Raw material prices increase due to supply chain issue.||Budget||Not Likely||Very low||Obtain price guarantees from suppliers with the lowest prices.||Low||Amy Lu - Accounting
Rohini Gates - Logistics
|004 - Failed Prototype||Prototype has quality and/or performance issues.||Quality||Not Likely||Very High||Create alternative timeline to accommodate stalls and reworks at the product design level.||Medium||Steve Kim - Design
Jane Doe - Production
Better planning, less risk
Identifying risks and mitigating their effects play a significant role in the success of any project. But the work isn’t over once you complete a risk registry — you must ensure that it remains up-to-date and accessible to your team.
Let Tempo lend you a helping hand. Our Roadmunk application allows you to track project dependencies, communicate upcoming work, and share timelines and status updates through a single point of contact accessible to both team members and stakeholders.
You can also gain insight into your project team’s workflow with Tempo Timesheets. Learn who’s working on what task and when to see a high-level view of productivity and progress so you’re always up-to-date on critical work.