Common risk responses and better alternatives

Ineffective response strategies are a frequent shortcoming of risk management plans. Project managers often make common mistakes when deriving risk response actions, resulting in inadequate strategies. Here are some of the most common mistakes and what can be done to replace and enhance those response actions.

Mistake #1—Referring to the use of standard project management tools as a response action. An example of this is stating that concerned stakeholders will be kept informed of the project’s status via the weekly status report. If stakeholders are particularly concerned, taking standard action is rarely enough.

Instead, describe actions that will be taken beyond what is delivered via a standard project management process. In the example above, holding face-to-face meetings with concerned stakeholders twice a week to update status more frequently and answer specific questions they may have is more suitable.

Mistake #2 – Referring to monitoring as a response action. For example, simple monitoring isn’t sufficient if there is a history of late delivery from a crucial and unique vendor. If the vendor is genuinely unique, contracting an alternate vendor (which would generally be a sufficient response action) may not be possible.

Instead, describe actions that will be taken beyond standard monitoring. Working more closely with the vendor is likely necessary to ensure timely delivery. During contract negotiations, seek to understand the cause of late delivery. It’s possible that contract terms could be arranged to provide incentives for timely delivery. Alternatively, working with the vendor’s project manager to align delivery plans might be helpful. Other activities may also be feasible, but they are all beyond the scope of “monitoring.”

Mistake #3 – Simply allocating a person to monitor and address a risk. This is a good step. But alone, it’s an insufficient response action. Without more details, stakeholders will only know who to contact to alert them of a risk materializing or who to consult regarding the risk status. What they will do, and what other impacts they might have on the project, remains a mystery to stakeholders.

Instead, allocate the person to manage the risk and describe the responsibilities, authority, or actions they will take to address it. Also, include what specific circumstances will trigger that action. That way, the project team, sponsor, and stakeholders’ expectations can be aligned, and the impacts of taking action on the project can be discussed in advance and confirmed at the time of action.

Mistake #4—Allocating contingency funding without a prescribed purpose. Discussing the allocation of funding, like only allocating a person, is a half-done solution. Knowing there is funding to address an action is okay, but stakeholders should understand what will be done with the funding to address the risk.

Instead, discuss what specifically will be done with the contingency funding. The only exception is when alternate actions may be taken based on the situation when the risk comes to fruition. In this instance, pre-determining the list of actions and the circumstances when they will be executed is the best approach.