Don't Wait for Disaster: The 4 Essential Steps to Managing Project Risk
Why does Project Risk Management matter in mission-driven work?
Because your work sits at the intersection of purpose and people. Nonprofit and mission-driven projects carry high stakes and limited margins for error. Project risk management gives you the clarity to lead with calm, protect your team’s capacity, and keep your mission moving forward, even when conditions shift.
Let’s explore project risk management and four essential steps that make that kind of steady, intentional leadership possible.
Project Risk Management FAQ
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A project risk is any condition or event that may affect your scope, schedule, cost, or team’s ability to deliver. Risks aren’t inherently bad - they’re signals that something may shift and deserve your attention.
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Three areas tend to shape the project landscape for nonprofits and other mission-driven environments:
Outside forces, from shifting regulations, funding instability, to partner delays.
Inside forces, like capacity gaps, silos, burnout, and resistance to change.
Incorrect assumptions, such as unrealistic timelines, vendor delays, and staffing expectations.
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Look at two factors: likelihood and impact. High-likelihood or high-impact risks deserve careful planning.
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Absolutely! Early feasibility checks, clear scope, defined roles, and strong stakeholder communication reduce many common risks before the project even begins.
The Four Essential Steps to Managing Project Risk
Project work, especially within nonprofits and other mission-driven organizations, is filled with potential challenges. But what if you could anticipate those hurdles and plan your response before they derail your efforts? Project risk management helps ensure your project runs smoothly, with the ultimate goal of minimizing the negative impact of threats while maximizing any potential opportunities.
Here are the four essential activities of project risk management that you should incorporate into every project:
1. Identify Potential Risks
The first step is looking closely at your project environment to identify anything that might impact your work. Risks are conditions that may impact your project, and they can be positive or negative. While positive risks (opportunities), like an unexpected influx of time or money, are often easier to handle on the fly, focusing on negative risks (threats) is critical for planning and immediate response.
To identify potential risks, consider the following areas:
Outside Forces: These are external factors that could derail your project, such as changing prices, new regulations, or a funder or partner not providing promised resources. In nonprofit environments, a common threat is funding instability, often driven by reliance on government grants or donors.
Inside Forces: These risks come from within your organization. They might include departmental silos, communication issues that hinder collaboration, resistance to the change the project will bring, or limited capacity to staff or support the project.
Wrong Assumptions: If the assumptions you are making about your project are incorrect, they become risks. Assuming key staff skills will be available or that a vendor will deliver support on time would negatively impact your project if you are wrong.
Past Projects: Reviewing past projects can reveal recurring challenges that might present risks to your current work.
Common negative risks in nonprofit and mission-driven projects include scope creep, stakeholder divergence, staff burnout/turnover, and relying too heavily on volunteers.
2. Plan Your Response
Once you’ve identified potential threats, focus your planning efforts on the risks that are most likely to happen and those that will most negatively impact your project.
The best practice for documenting this planning is to create a risk register. This document formalizes your planning for threats and includes:
The risk itself.
The trigger: What specific event or condition indicates the risk has become a reality and requires a response?
The planned response.
The owner: The person responsible for monitoring and implementing the response.
3. Monitor Risks Throughout the Project
Risk management involves monitoring potential issues continually as the project progresses. Even risks that were initially assessed as low impact or low probability still need monitoring.
4. Implement Responses if Risks Become a Reality
If a trigger event occurs and a risk becomes reality, you can implement the response plan outlined in your risk register.
Proactive Planning as Risk Mitigation
While risk registers are excellent for planning defensive strategies, as they detail how you will react if the risk occurs, you can also try to avoid the risk entirely by incorporating mitigation steps directly into your project plan. Many common project risks can be significantly reduced or even avoided through good project planning. Careful upfront planning can mitigate issues like staff turnover, stakeholder divergence, scope creep, volunteer reliance, and burnout.
Project planning allows you to consider factors impacting your project, from budget and schedule delays to stakeholders and risks. Key steps that proactively mitigate risk include:
Confirming Scope Early: Discussing and confirming the project scope with key stakeholders early in the project helps avoid scope creep (when additions are made that detract from goals and delay delivery). The project scope establishes the purpose (the "why") and is crucial for buy-in and engagement.
Assigning Clear Roles: Planning for stakeholder engagement involves assigning clear roles and defining responsibilities. This clarity is essential, especially when relying on volunteers or cross-departmental staff, and prevents a few people from carrying the entire workload.
Strategic Capacity Checks: Risks related to limited resources, funding, and capacity can often be mitigated before the project even starts by conducting a project feasibility assessment. Feasibility determines if the project is something the organization can and should actually do.
Communication Planning: Project success hinges on good communication, which is critical for supporting engagement and mitigating risks and delays. By intentionally planning the communication methods (how) and frequency (when), you ensure stakeholders get the information necessary to engage effectively.
Risk doesn’t have to be a crisis! Risk management is not just about avoiding failure; it's about leading your project with clarity and confidence by intentionally planning for the unpredictable.
Move Forward With Clarity
If you’re ready to bring more calm, clarity, and structure into your project work, download our free Project Planning Checklist. It walks you through scope, stakeholders, roles, resources, and risks so you can lead your project with confidence.
Jami Yazdani is the founder of Yazdani Consulting & Facilitation, where we help mission-driven leaders turn project chaos into clarity and confident action. You lead the vision - we clear the path.