Successful Response Planning in Risk Management

Successful Response Planning Risk Management

You are not defenselessly exposed to risks in your project! After you have identified and analyzed the risks in your project, you can start with the next step—with response planning. With appropriate actions you reduce or avoid risks or are ready when risks are about to occur. The planning of actions and their timely implementation is your assurance that you will not be surprised by risks. This will make your project life a little quieter. This article shows you how to proceed with the planning of actions and what you have to pay attention to.

Response Planning for More Security

In response planning, you define actions to eliminate or reduce risks at an early stage, with the aim of lowering the overall risk of your project. These actions must then be implemented and monitored in a timely manner.

When you plan actions, you try to reduce the probability of occurrence and the impact of the risks and increase the probability of occurrence and impact of the opportunities found. These actions are documented in the action plan, monitored and, if necessary, adjusted during the course of the project. Reducing or avoiding risks increases the chance that you will complete your project on time and at budget.

“If you don’t actively attack the risks, they will actively attack you.” (Tom Gilb)

Tom Gilb

Tom Gilb sums it up: “Those who do not actively counter risks with effective actions will be surprised by them and will be intensively occupied for some time.” Do not let it come to that! With effective actions for the most important risks, your project life will become a lot quieter.

When planning actions, you will focus on the following three strategies:

  • Take actions to reduce the probability of occurrence or the impact of the risks before something happens (or increase it when opportunities arise).
  • Take action if the risk occurs: implement the Contingency Plan
  • Take action if the contingency plan is not effective: implement the Fallback plan

The key word in response planning is “appropriateness”. The appropriate action will be different for each risk. For some risks it will be appropriate to eliminate them as quickly as possible. For other risks, the action will be to do nothing and wait and see what happens or you might also consider stopping the project.

You can read more about the contingency plan and fallback plan in this article: The Fallback Plan – When Actions for Risks Are not Effective.

These Are the Steps When Planning Responses

  1. If possible, change the project plan to remove risks.
  2. If possible, change the project plan to reduce the probability of risks occurring and their impact.
  3. Define for the remaining risks a risk response strategy and define actions for the risks.
  4. Define a risk owner for each risk.
  5. Define, where appropriate, contingency and fallback plans in case risks occur.
  6. Define an contingency reserve (time, money) for identified risks for which no actions has been defined (residual risks).
  7. Define a reserve for risks that have not been identified.
  8. Repeat the qualitative risk analysis to see if the new sum of top risks is below the defined threshold. If this is not the case, continue with action planning.
  9. Obtain approval for the risk response plan and the reserves from senior management and relevant stakeholders.
  10. Make a project Go/No-Go decision with senior management based on the results of the response planning.

Response Planning is Teamwork

How do you best approach response planning? How much time should you spend on it? Who is involved in this? There is no clear answer to all these questions. The methods, participants, and time required depend strongly on:

  • the size of the project
  • the complexity of the project
  • the available resources and
  • the priority of the project

You should have already defined how to proceed with response planning in the risk management plan. For small projects, one meeting with the project team members and important stakeholders is usually sufficient. After a brainstorming session lasting 30 minutes, a rough planning action could already be in place. For larger projects, you will need several sessions, for example, additional sessions with specialists for specific topics, with affected stakeholders or with subcontractors.

Recommended methods for response planning are brainstorming sessions, interviews, surveys via e-mail or combined variants.

Response Planning Requires Creativity

Risk identification tended to require experience and risk analysis tended to require analytical skills. Creativity is now required for response planning.

Often it is the participants, who were previously rather quiet, who now bring the creative ideas to the response planning. Note that you do not evaluate ideas for actions during the brainstorming session. Animate your colleagues to share also crazy ideas. Every idea counts! Crazy ideas often provide material for practicable actions. Really impossible ideas can still be sorted out later.

You should definitely pay attention to this: Identifying risks and planning and implementing actions is not a one-off matter. You do this periodically during the whole project duration—and if you do it out of conviction, your risk management will be successful!

In the next article you will learn more about the Risk Response Strategies.

Here You Can Find Even More Knowledge

Would you like to learn more about how to make your projects more successful with Project Risk Management? My book “Project Risk Management – Practical Guide” takes you an important step further!

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Posted in Risk Management.