Plan Risk Responses is one of the 42 project management processes described in the fourth edition PMBOK®. It’s one of the six Risk knowledge area processes, and one of the twenty Planning processes. The purpose of this process is to develop plans to minimize threats (negative risk) and maximize opportunities (positive risk). The Risk Register, which lists the project risks and information about them, and the Risk Management Plan, which provides overall guidance for the risk processes, are both needed. For each risk on the register that is important enough to warrant investing time into planning a response, a strategy is chosen. The seven strategies are: Avoid, Transfer, Mitigate, Accept, Exploit, Share, and Enhance. Please see the earlier postings of Positive Risk Strategies (posted April 1, 2009) and Negative Risk Strategies (posted March 31, 2009) to read more about these strategies. Contingency Response Strategies may also be developed, which are plans that are executed only if a certain trigger occurs. The outputs of this process include Risk-Related Contract Decisions and updates to several documents including the Risk Register, Project Management Plan, and Project Document updates.
April 9, 2009
April 1, 2009
Positive Risk Strategies
For a project manager, a risk is an uncertain event. This potential event could be either desired (positive) or undesired (negative). A positive risk may be referred to as an opportunity, and a negative risk may be referred to as a threat. There are three unique strategies used for handling positive risk (exploit, share, and enhance), and one strategy that can be used for either positive or negative risk (accept). These are described as a tool and technique of the fourth edition PMBOK®’s Plan Risk Responses process. Here are some examples involving Katy, who is hoping that the positive risk event of “cookies being available this afternoon” occurs.
Exploit means that the potential positive event is made to occur. Katy drives to a grocery store and buys a box of chocolate chip cookies.
Share means that the opportunity is shared with a third party for the benefit of both. Katy has a friend who makes delicious oatmeal raisin cookies. Katy offers to buy the ingredients if her friend will bake a batch that they can share.
Enhance means that the probability and positive impact of the opportunity is increased. Katy sends a text message to her mother that reads “I wish someone cared enough to bring me cookies.”
Accept means that plans are not changed due to the risk, but if the opportunity does occur, it will be accepted. Katy hopes that because people know she is addicted to cookies, someone will think of her and give her some. She won’t ask anyone to get her some though.
March 31, 2009
Negative Risk Strategies
For a project manager, a risk is an uncertain event. This potential event could be either desired (positive) or undesired (negative). A positive risk may be referred to as an opportunity, and a negative risk may be referred to as a threat. There are three unique strategies used for handling negative risk (avoid, transfer, and mitigate), and one strategy that can be used for either positive or negative risk (accept). These are described as a tool and technique of the fourth edition PMBOK®’s Plan Risk Responses process. Below are some examples of the negative risk strategies as related to Katy baking a wedding bake for her daughter’s wedding.
Avoid means that plans are modified to completely eliminate the threat. Katy originally planned to bake a five-tier wedding cake, but she is so afraid that it will collapse, that she has decided to avoid the risk of collapsing altogether by baking the five cakes and setting them each on their own platter beside each other on the cake table.
Transfer means that the ownership and consequences of the risk are transferred to another party. Katy decides to buy cake insurance from a local baker—so that if the risk of her cake being ruined occurs, the baker will be able to bring a replacement cake in time.
Mitigate means that the probability or impact of the risk is lessened. Katy found a sturdy silver stand with five platforms for the five layers of cake. Although it appears that the cakes are balanced on top of each other, they actually aren’t. Because of this, it is very unlikely that the risk of the cake collapsing will occur.
Accept means that plans are not changed due to the risk, and the consequences of the risk event happening are simply accepted. Katy decides to make the five-tier cake. In the unlikely case that it becomes ruined, there simply won’t be wedding cake for the guests to eat.
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