Week 4 - Risk Mitigation

What are the 4 types of risk mitigation?

1. Avoid 2. Minimize 3. Transfer 4. Accept

What are the 4 common ways to deal with risk?

1. Avoid the risk 2. Accept the risk 3. Reduce or control the risk 4. Transfer the risk

What are the 4 common types of dependencies?

1. Finish to start (FS) 2. Finish to finish (FF) 3. Start to start (SS) 4. Start to finish (SF)

Which of the following tools can help project managers visualize how to mitigate a risk in order to reduce or control it?

A decision tree

What is a decision tree?

A flowchart that helps visualize the wider impact of a decision on the rest of a project

What is a risk management plan?

A living document that contains information regarding high level risks and mitigation plans for those risks. It should be updated regularly to add newly-identified risks, remove risks that are no longer relevant, and include any changes to the mitigation plan

What are some basic components of a risk management plan?

A probability and impact matrix A risk register Mitigation plans

Imagine you have learned that a contractor who has done quality work for your organization in the past has received some negative reviews recently. You choose to hire another contractor for the current project. This is an example of mitigating risk by?

Avoiding it

Continuing with the construction project scenario, imagine that you underestimated the amount of a particular material needed to complete the new building. You purchase more of the material at full cost, since you no longer quality for the bulk, discounted rate. What risk does this scenario demostrate?

Budget risk

What is an example of Finish to Finish?

Earlier in the day, you baked a cake. You can't finish decorating the cake (Task B) until you finish making the icing (Task A)

Continuing with the construction project scenario from the previous question, the project team completes the designs (Task A) and then begins construction (Task B). What type of dependency describes the relationship between Tasks A and B?

Finish to Start

Imagine that you're overseeing a project to construct a new office building for your company, and you need to determine your task dependencies. Which of the following tasks should come first?

Get stakeholder input to determine project goals

What is an example of Finish to Start?

Imagine you are getting ready to have some friends over for dinner. You can't start putting on your shoes (Task B) until you've finished putting on your socks (Task A)

Dependency Types - Start to Start (SS)

In this model, Task A can't begin until Task B begins. This means Tasks A and B start at the same time and run in parallel.

Dependency Types - Start to Finish (SF)

In this model, Task A must begin before Task B can be completed

Dependency Types - Finish to Finish (FF)

In this model, Task A must finish before Task B can finish (This type of dependency is not common)

Dependency Types - Finish to start (FS)

In this type of relationship between two tasks, Task A must be completed before Task B can start. This is the most common dependency in project management. It follows the natural progression from one task to another

Risk Mitigation Strategies - Accept

Lastly, you can accept the risk as a normal cost of doing business. Active acceptance of risk usually means setting aside extra funds to pay your way out of trouble. Passive acceptance of risk is the "do nothing" approach. While passive acceptance may be reasonable for smaller risks, it is not recommended for most single point of failure risks. It is also important to be proactive and mitigate risks ahead of time whenever possible, as this may save you from having to accept risks. In the Office Green scenario, the project manager could schedule a meeting with project stakeholders to discuss the increase in South American taxes and how it could impact the project cost. Then, they might decide to actively accept the risk by setting aside additional funds to source the seeds from another supplier, if necessary, or to passively accept the risk of not receiving the seeds at all this season

Risk Mitigation Strategies - Minimize

Mitigating a risk involves trying to minimize the catastrophic effects that it could have on the project. The key to minimizing risk stars with realizing that the risk exists. That is why you will usually hear mitigation strategies referred to as workarounds. What if the Office Green team decided to use both the original South American supplier and another supplier from a neighboring country? More than likely, the change in taxation and regulation wouldn't affect both companies, and this would provide Office Green some flexibility without having to completely eliminate their preferred supplier

Continuing with the construction project scenario from the previous question, which of the following tasks should come last in the project?

Move equipment to the new office

What is an example of Start to Finish?

One of your friends calls to tell you he'll be late. He can't finish his shift (Task B) and leave until his coworker arrives to start her shift (Task A) Task A - Your friend's coworker starts her shift Task B - Your friend finishes his shift

During the planning phase, what should you consider when communicating a risk to stakeholders?

Severity of the identified risks

What step should you take after you complete your risk management plan?

Share the plan with your team and stakeholders

Risk Mitigation Strategies - Transfer

The strategy of transferring shifts the responsibility of handling the risk to someone else. The Office Green team could find a supplier in North America that uses the seeds from several other South American countries and purchase the seeds from them instead. This transfers the ownership of South American regulatory risk and costs to that supplier

Risk Mitigation Strategies - Avoid

This strategy seeks to sidestep, or avoid, the situation as a whole. In the Office Green example, the team could avoid this risk entirely by considering using another seed that is widely available in several locations

What is an example of Start to Start?

You need to take the train home after work. You can't get on the train (Task B) until you pay for the train ride (Task A) Task A - Start by paying for your train ride Task B - Start going home by boarding the train