Jory MacKay
Jory is a writer, content strategist and award-winning editor of the Unsplash Book. He contributes to Inc., Fast Company, Quartz, and more.
March 12, 2024 · 11 min read

11 project risk examples: Watch out for these common pitfalls

11 project risk examples: Watch out for these common pitfalls title image illustration showing the title and a hole in the ground with a speech bubble saying

Project management is a risky business. Whether you’re launching a new product, migrating an IT server, or remodeling an operational process, project uncertainty contributes to 66% of projects failing (or partially failing) every year.

Risk management is the art of anticipating potentially project-derailing dangers and putting actionable steps in place to minimize their impact. But the problem is that risks aren’t always obvious or apparent — until you’re knee-deep trying to slog your way out of one.

Knowing what risks you could face is a project management superpower. In this guide, we’ll cover the importance of risk management, how to recognize risks early on, and 11 examples of common risks to look out for.

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The importance of risk management in project management

Risk management is the process of identifying, analyzing, and managing events that affect, or could affect, your project. Done correctly, risk management helps project teams anticipate things that may not go to plan and put actions in place to reduce uncertainty.

Risks can be both positive and negative. But most of the time, project managers don’t actively manage upside risks and instead spend their time focusing on risks that can harm their project’s chance of success.

While any given project can have hundreds of individual risks, they almost always fall under a few categories, including:

Illustration in blues and blacks showing a glass circle broken into 5 shards. Each shard has one category of risk, which are listed below

Without risk management, projects leave themselves open to failure. For example, a project that doesn’t consider the impacts of an increase in economic inflation may find itself wildly over budget when purchasing raw materials. If, instead, they’d spotted this earlier, they may have pre-purchased materials or requested an additional budget.

Aside from helping you to avoid disaster, risk management has a range of wider project benefits, including:

Risk management is a core component of project management, but it’s an area that you can only truly master with experience. And oftentimes, that experience of a failed project is the best way to improve for the future.

Two methods to help you recognize risks early on

One of the greatest challenges with risk management is that you can do everything right, and things can still go wrong.

It’s impossible to identify, analyze, and mitigate every single individual risk — especially at the early stages. Instead, you have to look at risk categories to get a better understanding of what dangers could creep up along the way.

Illustration in blues and blacks of a

The first way to look at risks is to break them down by what you know about (or could know about them). This process typically looks at four different types of risks:

While the known/unknown risk table is a common way to look at risks, there’s another lens to consider - this time, with just two different types:

  1. Project-level risks: These are risks that reside in your project and will have the power to affect your project. Essentially, these risks are entirely on you to identify, analyze, and prevent, with the consequences felt only by you if you don’t. Examples include an unclear scope, resourcing challenges, and stakeholder communications.
  2. Business-level risks: These are risks at a wider organizational level that affect everyone, including your project. While most of the time, they are out of your control to change, you can spot them ahead of time and try to plan accordingly. Examples include company policy changes, financial performance, or new industry laws and regulations.

No matter how you look at risks, it’s important to know there are some you can influence and some you can’t. As a project manager, you simply need to do the best job you can to keep you and your team on track.

11 common project risk examples (and how to avoid them)

Risk management is a skill that comes with practice. Sometimes, only a bad experience in the past can tip you off to a potential risk in the future. Luckily, many project managers have been caught out in the past!

To give you a head start, let’s look at 11 of the most common project risks and how you can avoid them for your project:

1. Project scope creep

One of the biggest risks to any project is the scope creeping over time. Scope creep is where the project team begins working on things they shouldn’t, either because they’re confused or their management is poor.

The consequences of scope creep: Left undetected, scope creep leads to the project wasting valuable time and resources on work that doesn’t add value.

Warning signs to look out for:

How to mitigate the risk of scope creep:

Project risks aren’t always obvious - until you’re knee-deep trying to slog your way out of one.

2. Changes in your team

One of the most common challenges project teams face is when a key team member leaves the organization. Staff turnover is normal, and especially in long-term projects, at least one member of your team will leave.

The consequences of a team member leaving: If the missing person’s knowledge and expertise aren’t replaced, it can cause the project to slow down, your team to miss key milestones, or even a wider dip in morale.

Warning signs to look out for:

How to mitigate the risk of team members leaving:

3. Organizational changes

Businesses are always striving to stay ahead of their competition. Expect that the environment around you could change at any minute, with new strategies, reporting lines, and priorities coming from the top.

The consequences of organizational changes: Organizational changes can throw you off course, causing projects to get re-prioritized, budgets to be cut, and goals and objectives to be changed.

Warning signs to look out for:

How to mitigate the risk of organizational changes:

4. Team conflicts

Project teams are high-pressure environments and it’s inevitable that personalities will clash. As a project manager, the key is to expect conflict and plan ways to use it in a constructive way that keeps the project moving forward.

The consequences of team conflict: Conflicts in the team can lead to a drop in team effectiveness, lower team morale, and even quiet quitting.

Warning signs to look out for:

Illustration in blues and blacks showing two people facing away from each other. The warning signs listed below are written and accompanied by little icons: A calendar with an important

How to mitigate the risks of team conflicts:

5. Technology failure

Technology is both the most helpful and most frustrating part of our lives. Especially when you’re delivering a new technology project, the chance of bugs, failed tests, or full-scale system crashes is much higher than usual.

The consequences of technology failure: Technology failure can cause a project to lose time, spend more money, and use excess resources.

Warning signs to look out for:

How to mitigate the risk of technology failure:

6. Resource underperformance

Unfortunately, not every employee performs how you’d want them to. With projects being such fluid environments, it’s common that someone isn’t performing how they should, whether they have the wrong skills, they’re demotivated, or just not the right fit.

The consequences of underperforming teammates: Resource underperformance can slow the entire project down, causing you to fall behind schedule, waste money, and lose stakeholder confidence.

Warning signs to look out for:

How to mitigate the risk of underperforming resources:

7. Cost challenges and budget cuts

Projects cost money, and unfortunately, no company has an infinite pot of it. A common project risk is that you’ll be hit with a budget cut and be asked to deliver the same scope with significantly less money.

The consequences of budget cuts: Cost challenges can make it difficult to operate, meaning you have to reduce your timeline, quality, or scope but still deliver the same objectives.

Warning signs to look out for:

How to mitigate the risk of cost challenges:

With the right approach, limitations can be liberating.

8. Supply chain delays

Suppliers are a big part of any project, but as an external stakeholder, you have less influence over them, leading to a higher chance of problems.

The consequences of supply chain delays: Supply chain delays can impact your timelines and lead to incurring additional costs.

Warning signs to look out for:

How to mitigate the risk of supply chain issues:

9. Acts of God

Extreme weather, natural disasters, and terrorist attacks are just some acts of God that can impact your project. Often, these fall squarely into the unknown-unknown category, but there are some things you can do to manage them.

The consequences of acts of God: Acts of God can impact any aspect of your project, be it timeline delays, budget demands, new scope, or reduced benefits.

Warning signs to look out for:

How to mitigate the risk of acts of God:

10. Changes to laws and regulations

Especially in sectors such as construction or financial services, the laws and regulations that govern industries are always changing. If these changes hit during your project, you may need to react at short notice.

The consequences of law or regulation changes: New laws and regulations often change the scope of a business’s services. These changes take time, cost money, and impact everyone’s objectives and goals.

Warning signs to look out for:

How to mitigate the risk of law and regulation changes:

11. Communication blockers

Regular and effective communication is the backbone of successful project management. So, if anything gets in your way of communicating with the team, there’s a risk everyone will become confused and disjointed.

The consequences of communication breakdown: Communication breakdown leads to other issues, such as scope creep, timeline delays, interpersonal conflicts, and resource challenges.

Warning signs to look out for:

How to mitigate the risk of communication issues:

The best way to improve your project communication is to use a project management tool such as Planio. Planio helps you keep everything in one place, with features for task management, document creation, team chat, and project status reporting, all working together to maximize team collaboration.

Screenshot from a Planio account showing a graphical report of the distribution of issue priority according to issue status

Try Planio with your own team — free for 30 days (no credit card needed) — and see how easy it is to run a successful project.

To finish: how to handle risks the right way

While we’ve covered a list of common project risks, every project is unique, and you’ll face your own set of risks that need managing.

Whatever the risk, following a clear risk management process is your best bet for neutralizing the threat. Here’s what to do:

  1. Risk identification: Start by identifying the risks to your project and write them down in your risk register. Risk identification first happens in the early stages of the project and is completed by holding a risk identification workshop.
  2. Risk Analysis: Once you’ve identified your risks, it’s time to analyze them. Specifically, you’ll want to define their likelihood of happening, their impact on your project, and their proximity (i.e., how long until the risk could happen). This will help you rate and prioritize your risks in order of severity.
  3. Take Action: Now you know your risks inside out, it’s time to start managing them. Take action to mitigate each risk, working to decrease the likelihood and impact the event could have on your project. For example, if you knew there was a risk of team members conflicting, you might ask them to do separate work or swap them to another project.
  4. Reassess and start again: Once you’ve taken action to reduce your risk, you must reassess the situation to determine if the action has had the desired effect. If not, repeat steps two and three until you’re comfortable with the severity of that risk.

If you want to dive deeper into the risk management process, check out our Guide to writing a risk management plan in 7 steps.

Turn uncertainty into success

Learning to manage risk effectively is essential for the success of any project.

Whether it’s scope creep, communication blockers, technology failure, or acts of god, there are signs to look out for and actions to take that will help you beat the uncertainty and stay on track.

Like many things in project management, a project management tool is a great way to keep your finger on the pulse. If you’re struggling to get your tasks, issues, actions, and risks in one place, check out Planio, the tool 1,500 businesses a day trust for their project management needs.