Select Page
← Go Back

Planning a risk response strategy that is flexible enough to address the major issues that may face your project is essential for ensuring that you are prepared for whatever may arise during the project’s course. Like so many elements of project management, the key to high-quality risk assessment and creating an effective response strategy lies in the preparation.

Identifying the Risk

The first step in creating the risk strategy for your project occurs during the planning phase, when risks are initially identified. This is usually done through the joint brainstorming of the PM, the project team and relevant stakeholders who have experience of similar projects, such as a project sponsor. A document is created, the Risk Register, to track the risks that have been uncovered.

Analyzing and Ranking Risk

During the project risk assessment process, after the risks have been identified, there are two major factors to consider for each risk: the probability/impact matrix and the risk response. The first of these involves establishing how likely a risk is to occur and, if it does occur, what effect it will have on the project. This can effectively be split into a box or matrix, with Probability on one axis and Impact on the other, resulting in the following:

  • High Impact/Low Probability
  • High Impact/High Probability
  • Low Impact/Low Probability
  • Low Impact/High Probability
Increase your business agility with Clarizen’s project management software

Risk Response 

The next part of the project risk assessment process is deciding how to deal with the risks that have been identified. There are five risk response strategies as laid out in the 6th Edition of the PMBOK:

  • Escalate: This is where you believe the risk is above your job title, such as dealing with national or international regulatory bodies, so the action is to inform a relevant senior executive and get their agreement to handle the risk.
  • Mitigate: This is where you attempt to minimize the impact the risk will have upon your project, for example spreading your transport requirements across a few firms rather than just relying on one.
  • Transfer: A common form of risk response, this is where you place the risk on a third party or vendor, for example by taking out insurance against a certain risk happening.
  • Avoid: This involves attempting to surgically remove the risk by cutting out the parts of the project that are most vulnerable to it, such as not using certain hardware if there’s a chance it might become impossible to import it. This strategy can require major structural changes to the project scope and be difficult to implement.
  • Accept: This is the most passive risk response. It requires simply acknowledging the presence of the risk without preparing a response plan. It is usually only used for very low probability risks.

Once you have established what the risks facing your project are, performed a risk assessment to establish how likely they are to occur and what impact they will have if they do, along with deciding on your risk response strategy, your risk register will constitute an effective and important project document. It can be altered as the project progresses, to either add new risks or to alter the variables of the initially identified ones, but throughout the project it will remain a key element, not only for your own project planning but also for both internal and external compliance.

What are you waiting for?

Learn why Clarizen is the right choice to engage your workforce and accelerate your business.

Learn How to Get 30% Higher Return on PPM Assets.

Get the Full Gartner's 6 Best Practices White Paper.
Preview: Gartner’s 6 Practices for Managing Portfolios to Drive Business Value
In the Gartner Market Guide for Adaptive Project Management & Reporting guide, Gartner, Inc. provides recommendations and evaluation criteria for executives and PMO leaders assessing Project and Portfolio Management (PPM) solutions. This guide outlines the adaptive project management and reporting process flow as well as a market review of current providers in the following categories:

However, another culprit may be limiting the success of your portfolios: Gaps in your PPM practice.

In a recent report, Gartner urges CIOs and portfolio managers to assess their organization’s performance against six best practices and develop an action plan to fill any gaps. The report notes that “Integrated portfolio management and governance has an important role, because well-governed I&T portfolios result in superior organization performance, with an increased return on assets of 30%.”

Download the report to learn how to:
  • Ensure that the intake process, prioritization and investment decisions that deliver business outcomes align with the organization’s strategy.
  • Create an adaptive culture to ensure that resources can support changing business (consumer) needs.
  • Track key performance indicators (KPIs) based on what the business cares about.
  • Put in place benefit realization, including continuous feedback to future prioritization decisions and business case assumptions.

Gartner’s 6 Practices for Managing Portfolios to Drive Business Value
If you like the preview and want the FULL PDF file, please provide your information and you can download it
Buyer’s guide to project management software