Developing Realistic Risk Responses

Project managers often fall short with planning risk responses, because the risk responses aren’t realistic or can’t be acted on. Here’s a checklist to ensure risk responses are realistic and will help the project succeed.?

• Do key stakeholders understand the risk response? Risk responses must be written using vocabulary familiar to a broad set of stakeholders. Avoid jargon or terms familiar only to technical teams. Schedule open meetings about risks and planned responses, allowing stakeholders to ask questions and provide input. This will both improve understanding and increase buy-in.
• Do responses Include clear and agreed-upon execution conditions? A realistic risk response must have a well-defined trigger point or conditions for activation. This ensures that the response is implemented in circumstances agreed to by relevant stakeholders. For example, if a risk involves potential supply chain disruptions, the response might be triggered when lead times exceed a certain threshold. With clearly defined execution points, the project team can act proactively and decisively.?
• Is the funding source identified? Risk responses must include details on where the funding is coming from, such as a contingency budget, a specific risk management fund, or an agreement to reallocate resources from other project areas. There needs to be a pre-defined process for releasing those funds as well.?
• Does the response align with the project goal and scope?? If a risk response significantly alters the project's direction, it isn’t realistic. Responses need to align with and support the project goal. For example, if a project to develop a new software product has an objective to build in-house expertise, a risk response to outsource core development work is detrimental.
• Do responses include measurable outcomes and targets? Measurable outcomes with a defined target help the project team assess the effectiveness of the response and adjust if needed. Examples of measurable outcomes might include a reduced probability of risk occurrence, decreased potential impact, or improved project KPIs.?
• Do complex risk responses have a mini-implementation plan? This plan outlines the steps required to execute the response, assign responsibilities, and set timelines. Think of it as a project within a project. For instance, if a risk response involves switching to an alternative supplier, the mini plan might include steps for vendor evaluation, contract negotiation, and transition of operations. This level of detail ensures that complex responses are actionable.

Of course, you need other information about risk responses: who owns the risk, how it impacts the project, and so on. Try creating a risk response template that includes basic 411 about the response along with these checklist items.

For more about risk responses, check out Bob McGannon’s Project Management Foundations: Risk course.

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