Risk Mitigation Strategies in Project Management
Risks are part of life – and they are surely part of project management. Savvy project managers know how to include risk mitigation strategies in their plans without stifling the potential of their projects.
“When we set out to tackle a new project, we are working toward achieving something, creating something, and trying something new. Therefore, risks are a natural part of the process. If we’re afraid to take chances and venture into uncharted waters, nothing would be accomplished,” says Dave Garrett, Chief Strategy & Growth Officer at the Project Management Institute (PMI), the largest association for project professionals.
“In today’s business landscape with the evolution of technology and stiff competition, risk-taking has become increasingly prevalent for project teams. As with investing, higher rewards often come with greater risk. The trick is to ensure the two are in balance — making the ‘bet’ you place a carefully calculated risk with a commensurate reward.”
What is risk mitigation in project management?
According to Garrett, an effectively managed project includes an understanding of risks. Risk mitigation is the process of anticipating them and using strategies to help your team take active steps towards reducing the likelihood of an event that could negatively impact the project’s success.
“Risk mitigation strategies must also include plans for responding to potential risks so that even if a disruptive event occurs, the team can address it quickly and the project doesn’t experience extensive setbacks,” he says.
Risk mitigation strategies for project managers
Ready to learn about risk mitigation strategies all project managers should know about? Here are Garrett’s favorite ones as a seasoned project management expert.
Host a risk-identification brainstorm
Hosting a risk-identification brainstorm is a powerful technique for getting a good idea of potential risks and avoiding blind spots. “Involve as many different perspectives as possible, no matter where participants fall on the org chart,” says Garrett. “There is power in numbers and diverse teams. Although it may seem natural to only involve team leaders in a risk identification brainstorm, diversity in thought has the potential to bring the best ideas forward as you identify potential risks within a project and how to mitigate against them throughout a project’s lifecycle.”
This also helps with buy-in and team cohesion – the more people feel they have a stake in the project, the better the chances of success, especially if issues arise.
Build and iteratively refine a risk register
“Taking the time to actively assess risks you may encounter and scenario-plan against those risks gives you the opportunity to prepare should any issues come to light. You’re always dealing with more than one risk. So you will want to itemize and prioritize them in some form of risk register,” recommends Garrett.
If you’re wondering what information to include, the minimum is understanding each risk – its likelihood, impact, and how effective you expect your risk mitigation strategies to be.
“While it’s true that we cannot plan for every possible risk, if you have scenario plans in place, you are more likely to be able to pivot, adjust, and innovate as your team works through the potential impacts of the risk together — which, in turn, can result in more team unity moving forward, as people are inherently united by conflict resolution.”
Crucial caveat: Your view on risks should never be static, according to Garrett: “We live in a constantly changing environment, which means the likelihood and impact of each risk will be changing, as well. The actions we take to mitigate that risk will change, clearly work, or fail, so those will need adjustment. In general, every project these days needs agile, active risk management — not a one-time assessment.”
Include room for team experimentation
Too much of a good thing can be counterproductive, so bake some freedom and unpredictability into your plan. “Risk mitigation doesn’t simply mean that you do what you can to avoid issues or conflict,” says Garrett.
“All projects involve taking chances, with the potential of a risk turning into a reward. If you have safeguards in place to protect your project against potential setbacks, the risk you take to achieve something greater may turn out to be an ultimate win for your team and the project at hand.”
Simply put, taking risks allows teams to innovate, so planning for some risk-taking is actually an important risk-mitigation approach.
Should every project induce risk mitigation?
If you’re wondering whether using the strategies above is necessary all the time, it’s a matter of context, but you should always consider risks in any project, big or small. It’s also important to reassess them throughout the lifespan of the project, whether you’re in the early stages of planning or later in the game during implementation.
Some projects may have more extensive risk-mitigation needs than others. Garrett shares the example of projects related to worker and public safety, healthcare, or any other large-scale societal impact.
The benefits of including some level of risk mitigation in all your project planning also include increased efficiency when it comes to budget and timelines. This helps your team get work done, “bring big ideas to life, and move on to where their minds and talents are needed next,” says Garrett.
“It is unrealistic to say that every project that applies risk mitigation strategies will be 100 percent safeguarded against risk and setbacks, but the idea is that the negative impacts to the project, and, therefore, the people affected by the projects, will be well-known and minimized,” he adds.
