How to create a risk management plan

What is a risk management plan?

A risk management plan is a detailed document that captures and codifies the processes and people responsible for identifying, assessing, managing, monitoring, and mitigating risks. Your company needs an enterprise risk management plan and a project risk management plan for every significant corporate project.

Why are risk management plans important?

Unaddressed risks can become threats that disrupt a critical project or your entire business. Risk management plans help you implement effective defenses against this by enabling multiple benefits:

• Proactive risk identification: Effective risk management plans can help your business identify risks and take steps to mitigate them before they affect a critical project timeline or business operations.
• Improved decision-making: Risk management plans can help you collect and leverage better risk data, improving your risk avoidance and mitigation efforts.
• Efficient resource allocation: Clear, well-crafted risk management plans can improve resource planning. This aids in assigning the right people and resources to each risk management project, reducing or eliminating duplication of efforts and incomplete tasks.
• Enhanced communication: Your risk management plans can help keep project and risk management teams, decision-makers, and stakeholders apprised of project progress. These plans can also include schedules for regular reviews, updates, and details about team members.
• Project success: Well-crafted risk management plans provide all the information necessary to maximize protection against threats to your projects and business. All your project management phases—project planning, project execution, and project management—must incorporate risk management measures. Effective threat management and protection is a successful project on its own. It makes you more likely to achieve your most important milestones in project management.

7 steps for a successful risk management plan

Every risk management plan must follow seven steps to provide effective protection against risks to projects and your business. 

Identify risks

• Use techniques such as brainstorming and SWOT (strengths, weaknesses, opportunities, and threats) analysis to uncover potential risks.
• Work closely with IT leaders and teams to integrate and synchronize cyber and non-cyber risk management efforts wherever possible.
• Maintain detailed lists of all identified risks.
• Assign specific people to maintain and update your risk lists.

Perform a risk assessment

• Use qualitative and quantitative methods to evaluate each risk.
• Prioritize the risks according to their potential impact on the project or business operations

Analyze risk triggers

• Determine what events or conditions could cause each risk to occur.
• Continuously monitor your environment for signs of a risk. Use automated monitoring and notification wherever possible.
• Develop, document, distribute, and regularly test and update contingency plans to respond quickly to an identified trigger.

Define a risk response plan

• Choose suitable strategies for each risk. Options include avoidance, reduction, retention, spreading, transference via contracts and insurance policies, and acceptance.
• Develop, document, distribute, and regularly test and update thorough plans for handling high-priority risks.

Designate risk owners

• Assign detailed responsibilities to specific team members.
• Make sure everyone understands their roles and responsibilities.
• Regularly review all assignments and update as needed in response to changes in people or the risk environment.

Implement the risk management plan

• Put the risk management plan into action after notifying all involved project team members and stakeholders.
• Ensure that implementation of project-specific risk management plans causes little to no disruption of business operations not involved in the project.

Monitor and review

• Ensure each risk management plan includes steps and schedules for regular testing and review.
• Monitor everything related to each risk management effort, using automated monitoring and notification solutions wherever possible.
• Review and update the risk management plan regularly to reflect new information and changes.

Best practices for risk management plans

Even the best risk management plans can't identify, assess, prioritize, monitor, or mitigate risks without help and support. Some additional best practices will help turn your risk management plans into effective risk management actions:

• Build a risk management culture. Users, including colleagues, customers, decision-makers, and partners, collectively pose the largest risk to your company. This is especially true regarding your IT environment, where cyber risks can disable your entire company. Education, training, and regular communication about risks and their mitigation can help reduce user-triggered risks. These efforts can create a risk management culture where users avoid risks instead of triggering or ignoring them.
• Engage and involve your stakeholders. Your risk management plans should include specific steps to identify, engage, and communicate regularly with those most affected by that plan. These steps help minimize disruption and prevent blindsiding stakeholders. They may also convert some passive observers into active supporters.
• Don't ignore regulatory compliance. Regulations affecting how companies handle personal, private, and proprietary information constantly evolve. Larger enterprises are increasingly requiring compliance with multiple frameworks and regulations. Notable risk management plan examples include the SOC (System and Organization Controls) 2 cybersecurity framework and the ISO/IEC 27001 international information management standard. Non-compliance can subject your company to significant fines, reputational risk, and limited ability to work with larger partners. Understanding and addressing all relevant compliance issues as part of your risk management plans is crucial. 
• Use project management tools. Your risk management efforts should use the systems, processes, and people your business uses for project management. Familiarity, expertise, and resources like templates and integrations with other enterprise systems can ease and speed your efforts. This is especially true if your company uses powerful, flexible, and readily adaptable tools like Confluence.

Future-proof your business with a risk management plan

Risk management plans can help your company identify, manage, and mitigate risks consistently and effectively. Minimizing and mitigating risks helps give your business a more flexible, reliable, and secure foundation for growth and digital transformation.

Confluence helps you create and implement effective risk management plans through its ability to:

• Bring order to chaos: Confluence can help turn disparate islands of information and experience into a shared, actionable resource. It centralizes key company-wide and project-related knowledge, making it instantly and securely accessible. Confluence helps your project and risk managers find what they want and discover what they need.
• Share across teams: Your team leaders and members can invite their peers to collaborate via real-time editing and inline comments. As you finalize risk management plans and other documents, you can share them with your company's stakeholders and decision-makers.
• Provide and help create templates: Confluence offers free templates that can aid planning and risk management at your company, as well as throughout the project management lifecycle.

Get started today with a free risk assessment matrix template.