Hybrid Project Management

16Reducing Risk

Risk identification and analysis is necessary, but it is meaningless without following through by implementing risk responses. There are several ways you can respond to risks, ranging from avoiding them altogether to accepting them. For risks that you accept, you may choose to have a contingency plan or use contingency reserve.

In this chapter you will learn about five categories of risk responses that can be used for threats on predictive and adaptive projects. You will see how you can adjust a backlog to accommodate risk responses. We will also demonstrate different techniques for estimating the necessary contingency reserve to conduct risk activities and fund risks that you decide to accept.

RISK RESPONSES

There are some risks where you know right away how you should respond. Others require a bit more thought to determine the best response. In this chapter we will explore five categories of risk responses:

• Avoid;
• Mitigate;
• Transfer;
• Escalate; and
• Accept.

You can employ multiple responses to a risk event if you feel it is necessary. Threats and opportunities have similar responses; however, we will focus on responses for threats, with only a brief explanation of the complementary opportunity responses.

Risk Avoidance

When avoiding a risk, you're taking actions that eliminate the threat. Here are some options for avoiding threats.

Risk avoidance: Taking action to eliminate the threat.

• Eliminate uncertainty: If you have uncertainty associated with ...