There are a number of ways to address the high-threat problems you identify. Let's examine all of the options for dealing with risk and potential problems:
Avoidance. In avoidance, you choose a course of action that eliminates your exposure to the threat. This often means that you're now pursuing a completely different course from what you'd originally planned. The space shuttle program provides an excellent study in avoidance. Many flights are carefully planned and then, because of marginal weather conditions, scrubbed. Delaying the takeoff of a space shuttle mission because of a weather threat is a perfect example of risk avoidance.
Transfer. The most widely quoted example of risk transfer is something we're all very familiar with—insurance. Risk transfer does not "treat" the risk; it simply makes another party responsible for the consequences of the risk.
Assumption. This means that you are aware of the risk, but choose to take no action on it. You're agreeing to accept its consequences or to simply deal with them if it happens. That's essentially how you're treating threats that fall below the threat rating described above. Assumption is also a valid strategy in situations where the consequences of the risk are less costly and/or less traumatic than the effort required to prevent it.
Prevention. Prevention refers to action taken to reduce the probability of occurrence of a potential problem. Ordinarily, it will be your first course of action in dealing with high-threat problems. Prevention begins with identifying the root causes of potential problems. Determining root cause may allow you to identify preventive measures that could reduce the probability that a given problem will occur. Be sure to revise the project plan to incorporate any preventive actions that you intend to take, so that they're not overlooked or forgotten.
Mitigation of Impact. This strategy aims at reducing the negative effects of a problem. You're taking measures to lessen the impact. For example, installing air bags in automobiles does nothing to reduce the probability of accidents, but it may significantly reduce the effects. It's important to note that mitigation tactics may be viewed as a waste of time, money, and effort, if the potential problem does not occur.
Contingency Planning. Contingency plans are specific actions that are to be taken when a potential problem occurs. Although they're intended to deal with problems only after they've occurred, contingency plans should be developed in advance. This helps ensure a coordinated, effective, and timely response. Also, some plans may require backup resources that need to be arranged for in advance. Contingency planning should be done
Prevention is often the least costly and most reliable strategy for dealing with risk—particularly in situations where the impact is high.You should plan and execute preventive measures whenever it makes sense.
only for the high-threat problems that remain after you've taken preventive measures.
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What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.