How do you handle project risks that are beyond your control or influence?

Project risks are uncertain events or conditions that can affect your project's objectives, scope, schedule, budget, quality, or stakeholder satisfaction. Some risks are within your control or influence, such as resource availability, scope changes, or technical issues. You can manage these risks by identifying, analyzing, prioritizing, planning, implementing, and monitoring them throughout the project life cycle. However, some risks are beyond your control or influence, such as natural disasters, political instability, market fluctuations, or regulatory changes. How do you handle these risks that can derail your project or cause significant losses?

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1 Identify external risks

The first step to handle external risks is to identify them as early as possible in the project initiation and planning phases. You can use various sources of information, such as historical data, expert opinions, industry reports, news articles, or stakeholder feedback, to create a list of potential external risks that can affect your project. You can also use tools such as PESTLE analysis (Political, Economic, Social, Technological, Legal, and Environmental factors) or SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) to scan the external environment and identify the key factors that can pose a threat or an opportunity for your project.

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2 Analyze external risks

The next step is to analyze the external risks by assessing their probability and impact on your project objectives. You can use qualitative or quantitative methods, such as risk matrices, scoring models, or Monte Carlo simulations, to rank the external risks according to their severity and likelihood. This will help you to focus on the most critical external risks that require your attention and action.

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3 Plan external risk responses

The third step is to plan how to respond to the external risks that you have identified and analyzed. There are four main types of risk responses: avoid, transfer, mitigate, or accept. However, for external risks that are beyond your control or influence, you may not be able to avoid or transfer them completely. Therefore, you may need to use a combination of mitigation and acceptance strategies to reduce the negative effects or enhance the positive effects of the external risks. For example, you can mitigate the risk of natural disasters by having backup plans, contingency funds, or insurance policies. You can also accept the risk of market fluctuations by adjusting your pricing, marketing, or delivery strategies.

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Andy Wilson

People Leader | Navy Veteran | Problem Solver | Lifelong Learner
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One of the most effective ways is to develop a contingency plan that identifies potential risks and outlines the steps to take in case those risks materialize. Another way is to establish clear communication channels with all stakeholders involved in the project. This will help in identifying potential risks early on and taking appropriate action to address them. Additionally, it's always important to keep track of the progress of the project and monitor any potential risks that may arise. Ultimately, the key to managing project risks is to remain agile and adaptable. You need to be able to adjust your plans and strategies in response to changing circumstances and emerging risks.

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4 Implement external risk responses

The fourth step is to implement the external risk responses that you have planned. You need to assign roles and responsibilities, allocate resources, and communicate the risk response actions to the relevant stakeholders. You also need to document the external risk responses in your project risk register, which is a tool that tracks and records the status and outcomes of all the project risks.

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5 Monitor external risks

The final step is to monitor the external risks throughout the project execution and closure phases. You need to review and update the external risk register regularly, as well as the project plan, budget, schedule, and scope. You need to track and measure the effectiveness and efficiency of the external risk responses, and report any changes, issues, or results to the project team and stakeholders. You also need to capture and document the lessons learned from the external risk management process, and share the best practices and recommendations for future projects.

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6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?

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How do you handle project risks that are beyond your control or influence?

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1 Identify external risks

2 Analyze external risks

3 Plan external risk responses

4 Implement external risk responses

5 Monitor external risks

6 Here’s what else to consider

Project Tracking

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