Learn Response Strategies for Negative Risks

Learn Response Strategies for Negative RisksLearn Response Strategies for Negative RisksRisk management on a project centers on being able to identify what might go wrong. These are the negative risks, otherwise known as threats to your project. Its important to identify them and record them in your risk register so you know what might be coming round the corner to interfere with your chances of completing your project successfully. But identifying them is only the beginning. Once you have done that, you also need to work out what to do about them. You do have options. There are four strategies for responding to negative risks Avoid, Transfer, Mitigate and Accept. Lets look at those now. Avoid When you avoid a risk, you stop it happening totally. Worried that a particular feature on your software wont go down well in the international market? Switch it off. Thats an example of avoiding a risk completely you put a plan in place to make sure that it could never happen. You cant do this with all risks, but its a handy approach to shutting down trouble before it happens where you can. Transfer Transferring a risk means shifting the responsibility for it on to someone else. The best example of this is an insurance policy. When you buy an insurance policy, you shift some of the impact of the risk on to the insurance firm, and they would be liable if the risk did happen. You can also write transfer of risk clauses into your contracts with suppliers. Get legal advice, though, before you do thisso that you are sure that you are transferring the right risk and that youll be getting the outcome you want. Find out more about appropriate contracting. Mitigate Mitigation is probably the most common risk response strategy. It is where you come up with actions to make the risk less of a problem if it does happen. For example, if you have a project risk around the testing phase taking too long, you can add more testers to your resource pool. The risk still might hap pen, but at least youve done something to lessen the potential fallout. Accept Your final option for dealing with a negative risk is to simply accept it. Sometimes problems happen, and youve analyzed this one and decided that you arent going to do anything about it. Being able to adapt (if it does happen) is one of the top skills for project managers. Accepting that a risk might happen is bedrngnis the same as not making a decision or putting your head in the sand. You are actively, and with the support of your project sponsor and senior management, making the decision to do nothing. Its the riskiest, in many respects, but you can take that calculated risk based on what it would cost you in terms of time and effort to put a different kind of risk response strategy in place. It may be far too costly to implement any other kind of risk management strategy, given the impact that this risk would have. If the chance of a risk happening is tiny, or the impact it will have if it does h appen is very small, then doing nothing is a perfectly acceptable solution. These four options span a wide spectrum of risk response so you should be able to find an approach here that suits the level of risk that you are prepared to take as a project team. The most important thing is to put together your action plan and work through the steps you identify. Then if the risk does happen, you have your Plan B already sorted out, and you can navigate through the problem easily.