An effective risk mitigation plan addresses the risks before they turn into problems. However, what makes up a risk mitigation plan by the way? Since it is a plan, how can you effectively develop such a plan for your business’ needs?
Basic Risk Mitigation Plan In Steps
Whatever investment, project, or development you are to make. It is a risk. Moreover, even the business itself is a risk. Thus, risks are inevitable. And is naturally part of the business. So, the key is ‘mitigation’.
That is, effectively addressing these risks. Moreover, the goal is to prepare the business and everyone involved. So here are the steps to help you with.
Identification Of Risks
Risks should be considered in every starting point of a project. This is something that should not be missed by project management.
Although there are considered to be called ‘known risks’. But the PM need not be complacent and comfortable with them. Even though they have successfully won over these risks before. Because it is true that most of the time, risk comes from unexpected sources and periods.
Here are the following steps and tips you can make in risk identification:
- Create a standard risk identification checklist.
- However, a need may arise for editing and customizing the checklist. That should be in accord with your project.
- Interview your project team members and stakeholders regarding this.
- Next, create a risk repository. Moreover, it is more convenient to have this online. Perhaps with an online PM software.
- Be organized. So categorize your risks. For instance, may it be technical or organizational? Or whatever fits your project.
Identification is followed by analysis. The analysis includes both the qualitative and quantitative impact of the risks. Besides, weigh these factors while doing so:
- The likelihood or probability of the risk occurring.
- If ever it occurs, also consider how great would be the impact.
You can have these into a spreadsheet, perhaps.
Consider the following steps in doing so:
- List the risks.
- Score or rate the risk probability from a low, medium, to high risk.
- Next, map out the risk impact of each. Also, you can rate the probability from low, medium to high risk.
- You can ask each member of the team to individually score.
- Get the overall average. And calculate the overall risk score. You can get this by calculating the product of Risk Probability and the Risk Impact.
Getting an overview of your risks must help you decide which to prioritize. Also, this will prepare you for the next steps.
This follows the analysis stage. In planning your risk response, make sure to address the following:
- How to eliminate the risks?
- Also, how to lower the risk impact and probability?
Moreover, budget and time expenses should be mapped out in this phase.
Create A Backup Plan
Always be aware and prepare that risks can also change in classification. Thus, having a contingency plan is crucial.
Doing so must include a consistent re-evaluation of the risks. Also, continually monitor if set solutions are working. If not, maybe changing some of the ways may help.