Risk Management Consultants will emphasize the criticality of formal risk management to achieve program success. However, most of the pleas of Risk Management Consultants seem to go unheard because people assume that they are just trying to drum up business. It is a proven fact that continuous risk management maximizes the probability of program success. This is true regardless of whether the program is internal to the organization of the program is external (concerning client delivery). A risk management system is essential to every organization to ensure success. Even something as rudimentary as a list if potential risks is useful as this will help in providing continuous visibility to risks and also help in mitigating identified risks. However, in order to be most effective, any risk management plan should consider developing a comprehensive approach based on several factors. A proven risk management approach should at minimum be based on the following processes: - Risk identification—What can go wrong? - Risk assessment—How bad could it be? - Risk mitigation—What can we do? - Risk monitoring—How will we track? - Risk control—When must we decide? - Risk reporting—How will we communicate? - Risk training—Is prevention possible? Every Risk Management Program should be a proactive approach to capture risks. After potential risks are identified, organizations should determining the probability of occurrence for these risks and identify the resulting effects. The next logical step is identifying one mitigation strategy at minimum for every risk. The organization can then manage these risks by measuring progress against the selected mitigation approaches. The risk management approach should continuously monitor risk through activities such as identifying, analyzing, mitigation planning, tracking, and controlling risks. Additionally, risk management programs balance the cost of risk occurrences with the cost of mitigation activities by prioritizing risks and mitigation activities. A sample Risk Management matrix and a pictorial plan is available on the free downloads section of this website.