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How To Cope With Risks?

Getting a handle on project risks is a slippery job, but it is worth the effort if you and your project team desire to sleep more soundly at night. Once you have a list of assessed risks, you can begin brainstorming a variety of ways to avoid, minimise or manage them. This is a quick and simple process to do it.

Consider Whether You Can Completely Avoid Or Eliminate Each Risk

If your risk involves not having enough time to incorporate certain requested features, is it possible to agree on removing the features from the requirements list entirely? Record any ideas for avoiding the risk altogether.

If You Cannot Avoid A Risk, Brainstorm Risk Management Alternatives

Alternatives are ways of mitigating the risk - from the simplest ideas to more sophisticated solutions. For the Features-versus-Time risk, one strategy could be to negotiate a way to phase in the features over time. Another might entail engaging more people or resources to address the features, if feasible. In some situations, you might even be able to buy insurance to mitigate a risk.

Identify Your "Do-nothing" And "Next-to-nothing" Alternatives

These are the options that would remain available to you if you did not pursue the project or solution you are considering. "Do-nothing" could mean the status quo, for example, and "next-to-nothing" might denote an option that already exists but has been ignored. These will help you remain clear about whether you must do something, and what your fallback position is if you cannot do anything.

Give Each Risk Alternative A "Risk Reduction Likelihood" Score Or Rating

If you want to move forward with the project or solution, but cannot find a way to avoid or eliminate the risk, you can weigh the relative merits of each alternative you brainstormed in point 2 above. Similar to the assessment phase, you can assign relevant values to each of your alternatives.

In this case, these values represent the likelihood that each alternative can significantly reduce the negative impact of the risk on the four key factors: cost, schedule, quality and features. For instance, a High Likelihood of reducing the impact might be a 9; a Medium Likelihood, a 5; a Low Likelihood, a 1; and No Likelihood, a zero; with a different value possible for each of the four key areas.

By adding up the values for each alternative, you will have a rough score for each that indicates which alternatives seem to be the best candidates for minimising the risk - the higher the score, the better. You might also want to consider combining alternatives. Using two or more together might help reduce the risk in a complementary way.

When you are done, you will have a risk management plan consisting of analysed risks, with a ranked list of alternatives for handling each one. Even if you decide not to take on the project you are evaluating, you will have used 20/20 foresight to make that decision, instead of 20/20 hindsight to find out the hard way after it has happened.


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