Quick Definition:
Risk Management is the process of identifying, analyzing, and responding to any event that could potentially impact a project’s timeline, budget, or quality. Common strategies include avoidance, mitigation, transfer, and acceptance.
The 4 Key Risk Response Strategies
When a risk is identified, a project manager must decide how to handle it. The PMBOK Guide outlines four primary strategies for negative risks (threats):
- Avoidance: Changing the project plan to eliminate the threat entirely.
- Mitigation: Taking action to reduce the probability or impact of the risk.
- Transfer: Shifting the impact and ownership of the risk to a third party (e.g., insurance).
- Acceptance: Acknowledging the risk but taking no action unless it occurs.
Identifying Risks Early
The best time to manage a risk is before it happens. Use techniques like brainstorming, SWOT analysis, and expert judgment to build a comprehensive Risk Register.
