How can you effectively monitor and report on transformation risks?

2 Identify the risk sources

Next, you need to identify the sources of transformation risks, both internal and external. Internal sources are those that originate from within your organization, such as the resources, capabilities, processes, culture, and people involved in the change initiative. External sources are those that come from outside your organization, such as the market, competitors, customers, regulators, suppliers, and partners. You can use various tools and techniques to identify the risk sources, such as brainstorming, interviews, surveys, checklists, SWOT analysis, PESTLE analysis, and scenario planning.

3 Analyze the risk impact

Once you have identified the risk sources, you need to analyze their impact on your change initiative. This means assessing the likelihood and severity of each risk, and how they may affect the project objectives, scope, time, cost, quality, and benefits. You can use qualitative or quantitative methods to analyze the risk impact, depending on the availability and reliability of data. Some examples of qualitative methods are risk matrices, scoring systems, and risk registers. Some examples of quantitative methods are decision trees, Monte Carlo simulation, and sensitivity analysis.

4 Plan the risk response

After you have analyzed the risk impact, you need to plan your response to each risk, based on your risk appetite and tolerance. This means deciding how to deal with each risk, whether to avoid, reduce, transfer, accept, or exploit it. You also need to assign roles and responsibilities for implementing the risk response, and allocate resources and budget accordingly. You can use various tools and techniques to plan your risk response, such as risk action plans, contingency plans, escalation plans, and risk owners.

5 Monitor the risk performance

The next step is to monitor the risk performance throughout the change process, to track the progress and effectiveness of your risk management activities. This means measuring and reporting on the actual versus planned risk exposure, impact, and response, and identifying any deviations or changes. You also need to monitor the external and internal environment for any new or emerging risks, and update your risk assessment accordingly. You can use various tools and techniques to monitor the risk performance, such as risk dashboards, risk indicators, risk audits, and risk reviews.

6 Communicate the risk status

The final step is to communicate the risk status to the relevant stakeholders, to keep them informed and engaged in the risk management process. This means reporting on the key risk metrics, issues, actions, and outcomes, and highlighting any achievements, challenges, or lessons learned. You also need to communicate the risk status in a clear, concise, and consistent manner, using the appropriate channels, formats, and frequency. You can use various tools and techniques to communicate the risk status, such as risk reports, risk meetings, risk newsletters, and risk presentations.