This week, we learned of the possible risk responses for both positive and negative risks. Of all of the possible responses for a negative risk that we learned about, which one should likely be used the most in a typical risk management plan? Which one should be used the least in a typical risk management plan?
Lesson shown below:
At the completion of the qualitative risk analysis process, the risk register has been updated and risks have been assigned to risk owners. The risk response planning step begins with the risk owners reviewing the risks and determining the appropriate response, if any, to a given risk. You will remember that in the qualitative step, we identified risk owners who are responsible for managing the risk. These risk owners own the risk and are responsible to implement any proactive or reactive response plans.
These response plans involve the use of the below response strategies. There are various response strategies for both positive and negative risks.
Negative Risk Response Strategies
Avoid: This is a proactive response. One finds a way to get rid of it. Most often this would be finding an alternative that will not generate the risk. This strategy normally involves removing work from the scope and the WBS to prevent the risk from ever happening.
Transfer: This is a proactive response. It moves the risk to someone else. Usually, this can be done by finding someone to take on the riskier portions of the projects, such as an outside vendor or by buying insurance.
Mitigate: This is a proactive response. If you can't avoid or transfer the risk, you will need to do something to lessen either the chance that risk will occur or the damage it will do if it does occur.
Positive Risk Response Strategies
Exploit: This is a proactive response. The response should be such that it makes sure the opportunity is taken. In other words, make this risk happen!
Share: This is a proactive response. The response will allow you to share the risk with a third party, such as hiring a consultant to help make the risk occur.
Enhance: This is a proactive response. The response will increase the probability and impact of the risk.
Positive and Negative Response Strategies
Active acceptance: Create a contingency plan or set aside a contingency budget or both to deal with the risk should it occur. This is reactive response.
Passive acceptance: The risk has little or no impact so there is no reason to devote resources to deal with it. Risks on the watch list usually get this response.
These responses are the overall categories that allow us to decide the direction we will take. One must make very detailed plans around these response strategies.