Risk mitigation strategies in project management

The capability of mitigating risks means they can be recognized proactively and addressed by implementing specific mitigation strategies.

Risk identification is undoubtedly an important and crucial step in project management, but by itself it is not enough.

Knowing and thinking about risk is not the same as doing something about risk.

Risk will happen; some will even bring positive results, others won’t; some will be minor, others catastrophic.

So here are some of the most common ways to mitigate risks that can be faced in developing a project.

Risk mitigation strategies: Expanding requirements

First of all, we must know what’s what… Exactly, what do we want to achieve with the project?

This is a key question to ask and have a clear understanding of it, it is in itself a risk mitigating factor because it automatically removes all the mistakes related to “we didn’t know what we were doing“.

Taking full advantage of feasibility studies, kick off meetings with stakeholders and user groups to test ideas before making a full commitment, ensures that what is delivered is really what is desired.

Risk mitigation strategies: Have the right project team

People working on a project may be part of some risks themselves, especially in the case of inappropriate skills or perspectives that do not fit the company environment.

People who are not available when needed also affect the timing of the project.

This is why team members must be chosen in a thoughtful manner, thus mitigating the risks associated with people.

Risk mitigation strategies: Risk distribution and/or transfer

A big mistake is to place all the responsibility for a risk on a single person or a group.

Without doubt, risk transfer is a proven and useful risk management strategy, but it must be used with care.

Mitigating one’s own risk by transferring it to someone else isn’t always the best approach.

For example, it is possible to transfer the risk to another player, but this could lead to increased costs – through increased supplier or insurance prices – which in many cases is not the most appropriate use of the organization’s funds.

The solution here is to look for solutions for managing risk jointly with other stakeholders considering the impacts of this 360-degree strategy.

Risk mitigation strategies: Communicate and listen

There is another way in which risks can be added to a project: lack of communication.

Communicating efficiently, consulting extensively and, above all, listening to the answers you receive, must be a core activity in any project.

This strategy can help the project manager to identify risks and engage more effectively with stakeholders.

Risk mitigation strategies: Assess project feasibility

Making use of feasibility studies and prototypes to test ideas and solutions before moving on to actual development can be an easy way to mitigate the risk of a project.

In this way it is possible to use this early stage as a test bed for checking concepts, methodology and solutions.

How? Break the project into phases and include time, at the beginning of each phase, for a feasibility study or survey.

This learning can be incredibly useful to shape the rest of the project and can prove – or disprove – the business case without having to commit the entire investment.

Risk mitigation strategies: Run tests

Arguably many people will know that when project time is nearing its end, testing is often the task that is cut out in the first place.

You should try to avoid this situation; testing is an important part of making sure that the project risk is reduced and manageable.

Tests help to eliminate much more important problems that may later fall on the project.

One way to make sure that you always have enough time to do tests is to estimate the “traditional” time needed to do tests and then double it.

This way, even if the project will encounter problems that will slow it down, there will always be room for tests.

Tests are often widely underestimated, but they are a great tool to detect defects or bugs that can be corrected so quickly, without causing much more serious problems later on.

That’s why carefully estimating and having a dedicated planning contingency for testing is fundamental in project management and can be considered a real risk mitigation strategy.

Risk mitigation strategies:  Have a plan B

Despite having planned everything, including risk mitigation strategies, an unforeseen problem occurs.

You don’t have to worry… it happens.

So the best way to deal with these unpredictable situations is to have alternatives to the hand, which you can include:

• Emergency funds
• Additional resources on standby
• Options to split the project into segments and/or reduce the scope

A plan B isn’t exactly something that the project manager plans to use. However, having one prepared as a backup in case a risk materializes unexpectedly can be extremely valuable.

To prepare this strategy, it is necessary to discuss tolerances and contingencies with the sponsor and stakeholders before the project begins.

Determine what additional funding can be provided to address unforeseen problems and how to access it if and when the time comes.

 

The key to dealing with the unknown is to have an attack plan, maintain flexibility and always make sure you learn the reality of the situation so that you can adapt your actions accordingly.

This is therefore the solution to successfully manage risk for any initiative or at any stage of a project.

You cannot avoid risks, however you can prepare yourself through appropriate mitigation strategies.