5 Key Risk Mitigation Strategies (With Examples) | Indeed.com

Risk mitigation refers to the process of planning and developing methods and options to reduce threats—or risks—to project objectives. FindjobsCompanyreviewsFindsalariesUploadyourresumeSigninSigninEmployers/PostJobStartofmaincontent CareerGuideCoronavirusJobResourcesFindingaJobMoreResumes&CoverLettersInterviewingStartingaNewJobResumeSamplesPay&SalaryCareerDevelopmentCareerPathsCoverLetterSamplesCoronavirusJobResourcesFindingaJobResumes&CoverLettersInterviewingStartingaNewJobMoreResumeSamplesPay&SalaryCareerDevelopmentCareerPathsCoverLetterSamplesCareerDevelopment5KeyRiskMitigationStrategies(WithExamples)5KeyRiskMitigationStrategies(WithExamples)ByIndeedEditorialTeamDecember16,2021TwitterLinkedInFacebookEmailCopytoClipboardWhenaproductionteamembarksonanewproject,thereareinherentrisksthatcanbeassociatedwithaproject’sprocesses.However,somestrategiescanhelpmitigatetheserisksaswellasanticipatingtheconsequencesoftheserisks.Thesestrategiescanbeusedtoidentify,assess,evaluateandmonitorrisksandanyaccompanyingconsequences.Inthisarticle,wewillexplorefivecommonriskmitigationstrategiesandhowtheymightbeused.Whatisriskmitigation?Riskmitigationreferstotheprocessofplanninganddevelopingmethodsandoptionstoreducethreats—orrisks—toprojectobjectives.Aprojectteammightimplementriskmitigationstrategiestoidentify,monitorandevaluaterisksandconsequencesinherenttocompletingaspecificproject,suchasnewproductcreation.Riskmitigationalsoincludestheactionsputintoplacetodealwithissuesandeffectsofthoseissuesregardingaproject.FiveriskmitigationstrategieswithexamplesAppropriateriskmitigationinvolvesfirstidentifyingpotentialriskstoaproject—liketeamturnover,productfailureorscopecreep—andthenplanningfortheriskbyimplementingstrategiestohelplessenorhalttherisk.Thefollowingstrategiescanbeusedinriskmitigationplanningandmonitoring.1.AssumeandacceptriskTheacceptancestrategycaninvolvecollaborationbetweenteammemberstoidentifythepossiblerisksofaprojectandwhethertheconsequencesoftheidentifiedrisksareacceptable.Inadditiontoidentifyingrisksandrelatedconsequences,teammembersmayalsoidentifyandassumethepossiblevulnerabilitiesthatriskspresent.Thisstrategyiscommonlyusedforidentifyingandunderstandingtherisksthatcanaffectaproject’soutput,andthepurposeofthisstrategyhelpsbringtheseriskstothebusiness’attentionsoeveryoneworkingontheprojecthasasharedunderstandingoftherisksandconsequencesinvolved.Thefollowingexampleshowshowtheacceptancestrategycanbeimplementedforcommonly-identifiedrisks.RisksimpactingcostTheacceptstrategycanbeusedtoidentifyrisksimpactingcost.Forexample,aprojectteammightimplementtheacceptstrategytoidentifyriskstotheprojectbudgetandmakeplanstolowertheriskofgoingoverbudget,sothatallteammembersareawareoftheriskandpossibleconsequences.RisksimpactingscheduleTheacceptstrategycouldhelpidentifypossiblerisksthatcouldimpactscheduling,suchaskeepingtheprojectontracktomeetdeadlines.RisksimpactingperformanceThesetypesofriskscaninvolveperformanceissuesliketeamproductivityorproductperformance(suchassoftwareormanufacturedgoods)andcanbeidentifiedandacceptedaspartofprojectplanningsoallmembersareawareofpotentialperformancerisks.Readmore:CollaborationSkills:DefinitionandExamples2.AvoidanceofriskTheavoidancestrategypresentstheacceptedandassumedrisksandconsequencesofaprojectandpresentsopportunitiesforavoidingthoseacceptedrisks.Somemethodsofimplementingtheavoidancestrategyaretoplanforriskandthentotakestepstoavoidit.Forexample,tomitigateriskonnewproductproduction,aprojectteammaydecidetoimplementproducttestingtoavoidtheriskofproductfailurebeforefinalproductionisapproved.Thefollowingexamplesareotherwaystoimplementtheavoidancestrategy.RisktoperformanceMitigationofperformancerisks,suchasinsufficientresourcestoperformthework,inadequatedesignorpoorteamdynamics,canallowaprojectteamtoidentifypossiblewaystoavoidthesetypesofrisksituationsthatmaycauseissueswithprojectperformance.Forinstance,aproductionteammighttestmoredurableproductmaterialstoavoidtheriskofproductfailurewithlessdurablematerials.Similarly,ifthereisperformanceriskwithintheprojectteam’sdynamics,interactiveteammanagementcanbeimplementedtoavoidissueswithintheteam.RisktoscheduleAvoidanceofscheduleimplicationscanbeimplementedbyidentifyingissuesthatcouldcomeupthatwouldaffectthetimelineoftheproject.Importantdeadlines,duedatesandfinaldeliverydatescanbeaffectedbyrisks, suchasbeingoverlyoptimisticaboutthetimelineofaproject.Theavoidancestrategycanhelptheprojectteamplanwaystoavoidscheduleconflicts,forinstance,bycreatingamanagedschedulethatillustratesspecifictimeallowancesforplanning,design,testingandretestingandmakingchangesasnecessary.Non-workingtimescouldalsobeplanned,sothatriskstotimemanagementcanbeavoided.RisktocostAvoidingcostissuesisanotherimplementationofthisstrategy.Forexample,aprojectteammayoutlineallanticipatedcostsaswellasaccountforanycoststhatcouldcomeupsothattheconsequencesofgoingoverbudgetcanbeavoided.Readmore:HowtoCommunicateEffectivelyWithaDifficultTeam3.ControllingriskTeammembersmayalsoimplementacontrolstrategywhenmitigatingriskstoaproject.Thisstrategyworksbytakingintoaccountrisksidentifiedandacceptedandthentakingactionstoreduceoreliminatetheimpactsoftheserisks.Thefollowingexampleshighlighthowcontrolmethodscanbeimplementedforriskmitigation.ControllingriskstocostAprojectteammightimplementcontrolmethodsthatcandetectpossibleissueswiththeprojectbudget.Forinstance,controlsforriskmitigationmightincludeafocusonmanagement,thedecision-makingprocessorfindingflawsinthefundingfortheprojectbeforeissuescanarise.Thiscanalsogiveaprojectteaminsightintohowfundsarebeingdelegated,andifthereisariskofgoingoverbudget,theteamcanidentifythisbeforeithappensandtakemeasurestocontrolitsuchasreducingspendingoreliminatingaresourcethatcouldprovetoocostlyfortheproject.ControllingrisktoscheduleImplicationstoschedulingcanbecontrolledbydiversifyingtasksandthetimeittakestocompletethemamongtheprojectteam.Controlmethodscouldincludetrackingthetimeittakestocompleteeachtaskandassigningspecifictaskstoteammembersaccordingtothetimeinvolvedwitheachtask.Theprojectteammightalsotakeintoaccounttimemanagementstrategiestohelpcontrolanyrisktoprojectscheduling.ControllingrisktoperformanceImplementingcontrolstrategiesforperformanceriskcanincludemethodsofdirectingateam’sdailytasks,qualitycontrolmethodsfornewproductsandmeasuresfortakingactiontocontrolissuesthatcouldaffecttheoverallperformancewithinaproject.Related:WorkplaceContinuousImprovementPlan:Definition,TechniquesandExamples4.TransferenceofriskWhenrisksareidentifiedandtakenintoaccount,mitigatingtheconsequencesthroughtransferencecanbeaviablestrategy.Thetransferencestrategyworksbytransferringthestrainoftheriskandconsequencesofanotherparty.Thiscanpresentitsowndrawbacks,however,andwhenanorganizationimplementsthisriskmitigationstrategy,itshouldbeinawaythatisacceptabletoallpartiesinvolved.Thefollowingexampleshowshowandwhentransferencestrategiesareusedforriskmitigation.TransferenceforperformanceIf,forinstance,aproductionteamhasbuiltanewproduct,buttheresultpresentsdefects.Thedefectsmaynotbedirectlycausedbyissuesinproduction,butrather,causedbyissueswithmaterialspurchasedfromanoutsidevendor.Theproductcompanymaychoosetoassumetheconsequencesandmoveforwardwithresolutionstrategies—likeproductrecall—orthecompanymaytransfertheconsequencestotheoutsidevendorresponsibleforprovidingtheproductmaterialsbyrequiringthevendortocoverthecostsassociatedwiththeproductdefects.TransferenceforschedulingSometimesaprojecttakeslongertocomplete,andwhilethisisariskitself,transferencestrategiescanbeusedtoshifttheburdenofbeingbehindscheduletotheteammembersresponsiblefortimemanagement,ratherthanthecompanyasawhole.Withtheconsequencestransferredtotheteammembersresponsibleforscheduling,theproductionteam,designteamorotherscanfocusoncompletingtherestoftheirtasks.TransferenceforcostTransferenceofconsequencesregardingcostcanincludeholdingaccountantsandfinancialadvisorsaccountableforissuesinbudgeting.Forinstance,consequencesforaprojectthatgoesoverbudgetcanincludehigherproductioncostsandfundingformaterials.Iftheconsequencesareshiftedtothefinanceteamsresponsiblefortrackingthebudget,productionmanagersandteammemberscanfocusontheirresponsibilitieswhilethefinanceteamtakesmeasurestofixcostissues.5.WatchandmonitorriskMonitoringprojectsforrisksandconsequencesinvolveswatchingforandidentifyinganychangesthatcanaffecttheimpactoftherisk.Productionteamsmightusethisstrategyaspartofastandardprojectreviewplan.Cost,schedulingandperformanceorproductivityareallaspectsofaprojectthatcanbemonitoredforrisksthatmaycomeupduringcompletionofaproject.Thefollowingexampleillustrateswaystomonitorandevaluateriskandconsequencesthatcanimpactaproject’scompletion.MonitoringCostAfinanceteamorbudgetcommitteecanevaluateandmonitorriskstocostbycreatingareportingroutinetooutlineeachexpenditureofthecompany.Thisstrategyworksbyallowingteamstocontinuouslyassessthebudgetandchangeanycostplansaccordingly.MonitoringscheduleMonitoringprojectschedulescanincludeweeklyupdatestoevaluateeachteammember’stasksandhowlongittakesforthemtocompleteeachtask.Theteamcanthenreassessandkeeptrackofanyissuesthatcouldrisktheprojectfallingbehindschedule.Computersoftware,likecalendarsandprojectmanagementtools,canhelpmonitorandevaluatetimemanagementandprojectschedule.MonitoringperformanceMonitoringtheperformanceofproducts,teammembersandresourcesusedtocompleteaprojectareallexamplesofwaystoimplementperformancemonitoring.Evaluatingandassessingdifferentaspectsofacompany’sperformancecanhelpmitigateriskstoadecreaseinperformance,andtoolslikeproductivitysoftwarecanhelptrackandevaluateperformanceprocesseswithintheproject.Employeeperformancecanbemonitoredbyplanningandimplementingregularperformanceevaluationsandproductperformancecanbemonitoredbycontinuousproducttestingandreview.BrowsemorearticlesWireframevs.Mockup:What'stheDifference?WhatIsCybersecurityDataScience?DefinitionandApplicationsWhatToExpectFromanOrganizationalConsultant(PlusFAQs)WhatIsOperationalLeadership?(Importance,DutiesandTraits)WhatIsHumanResourceDevelopment?DefinitionandBenefitsWorkweeksinaYear:WhyTheyMatterandHowToCalculateThemWhatIsaMicro-EnterpriseandWhyAreTheyImportant?WhatIsaMarketingOperationsStrategy?WhatIsUXDesign?WhatIsGraduateSchool?WhyApply?WhatIsOperationsManagement?WhatIsScrum?ADefinitiveGuide