risk mitigation

5 Risk Mitigation Strategies in Project Management

The biggest risk is not taking any risk… In a world that is changing really quickly, the only strategy that is guaranteed to fail is not taking risks. Mark Zuckerberg

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isk identification and analysis must ideally culminate with a well-charted risk mitigation process. After all, starting early on with identifying risks is all about being able to minimize your risk liabilities. This essentially means that besides being a well-rounded process, risk mitigation also happens to be a real-time one. When it is an on-going process, it helps you stay proactive and incorporate necessary changes early on.
 
Let us first start by understanding what ‘risk mitigation’ really means.
 
“Risk mitigation entails compilation of actionable steps that help maximize your team’s potential and minimize the threat to the project’s goals. The implementation that follows ideally must execute and closely monitor the quality of execution.”
 
Here is a quick look at the most critical steps you’ll need to follow:

1. Acknowledge and accept the risk

 
The whole cycle begins when you can closely work with stakeholders from multiple levels to evaluate the various risks involved at the different stages of project execution. The risks themselves can also be segregated based on whether they are likely to affect traditional factors like finances, the timeline and the quality of delivery or not. Other factors to address here are the likelihood of the risk affecting your performance and the resources you have as well as whether or not it is compliant with the general code of ethics that you’ve built.
One you come to a comprehensive understanding of the risks, you can then meet to evaluate whether or not it is worthwhile to undertake the project with the repercussions being as they are.
It is important to keep your stakeholders as well informed as possible so that they understand the comprehensive implications of the risks before things spiral out of control.

2. Build a plan that avoids repercussions

 
Once all the stakeholders are notified of the risks and have evaluated the repercussions, you can primarily evaluate whether or not the project or the business undertaking in question is viable enough. Given that you get a nod, you will have to come up with policy and procedural measures that actively avoid these potential risks. Most project leaders also believe in having a mandate document that prescribes the protocol to follow when unforeseen risks show up.
The change of timelines based on the project risks is a common plan of action. if you foresee bad weather posing a threat to the progress of your construction projects, planning to have them in a different month is a classic, albeit simplified example of avoidance.




3. Try to include transference strategies

 
The next set of strategies that typically follow include transference. Here the risks are typically mediated and directed toward another channel. While transference is not a possibility in all cases, it is particularly useful when there are multiple parties involved or when external agencies are available in order to take over the plausible risks of the project.
Another popular example to help understand transference would be that of insurance. For projects that have multiple dependencies and factors applicable, placing a sound insurance vendor in the loop may unburden the original stakeholders to a large extent. Through transference, even if the project team is aware of the risks, they need not deal with it directly.

4. Control the implications of the risk

 
Under control, actions that minimize the overall severity of the risk is generally assessed and worked on. For example, the raw materials used, their quality and price points have a direct effect on the magnitude of the risks themselves. You can then choose to control the quality as well as the pricing such that they do not take away from the overall success of your project.
Moving on, control also takes into account the severity of the potential risks as well as the likelihood of the occurrence. This essentially means that, as the execution starts, you’ll know for a fact whether or not you are as risk-free as you’d like to be. This will let you take control of the project in ways that best avoid them.

5. Monitor the execution

 
if you get far enough, you’ll see that your team has been doing at its best and all you need to do is to make sure that you carry along the same speed. You will have to watch out for your weaker areas and stay focused to avoid potential risks. Besides this, it always helps to have on-site resources that are placed to ensure communication and coordination are at their finest in an event that the risk actually does occur. Monitoring and keeping a record of your progress also helps you draw tangible guidelines for future projects to draw from.
 
Risk mitigation really is part meticulous planning and part process maturity. With a little push, you will see that your projects can easily get risk-free.
 

Aakash Gupta is the resource management subject-matter expert at Saviom Software. He closely works with multinationals in their journey towards scientific resource management. He advocates best practices of the domain through the company’s various publications. You can reach him here.


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