Subtitles of the Movie

Our focus for this movie will be generating responses to risk. To date, we've created a risk management plan, a risk register where all the identified risks were documented, we've also assessed the risk on a qualitative level and further analyzed them on a quantitative level and updated these results within the risk register. Next we'll generate our responses using various strategies. Risk response refers to the procedures that are implemented if an identified risk occurs and as you will see, we'll also develop responses to be implemented before risk occurs. All of this is done through a process called Risk Response Planning. Through this process we'll review the prioritized list of risk and determine which actions, if any, should be taken. In some cases, we'll need to build a response that is executed immediately and in other the response will only be executed when certain triggers occur, letting us know that the risk is about to occur or has already occurred. There are different strategies for responding to negative risk versus positive ones. The following are response strategies for dealing with negative risk. We have risk avoidance, mitigation, transference and acceptance. Risk avoidance is a strategy that looks to eliminate risk. It's equivalent to taking a different path when the original path presents the risk. Whatever the probability level is of the risk, here we bring it down to zero. That may call for changing the plan or the schedule to bypass the risk. Risk mitigation is a strategy commonly used and likely one that you've heard of or used regularly yourself. This strategy reduces the probability and or the impact down to an acceptable level. You may ask, well, how do you know if the level is acceptable? That's why knowing the tolerance levels of the organization and documenting this within your risk management plan is important. An example of risk mitigation is running additional tests or building a prototype. Risk transference is a common strategy used for dealing with financial risks. Here the liability of the risk is shifted to a third party so we don't necessarily do anything about the impact or probability but transfer it over instead to another entity that's outside of the organization. Insurance, warrantees, bonds are all examples of risk transference. And risk acceptance is our final strategy for negative risk. Here we literally do nothing about the risk. If it happens, it happens. You accept the consequences of the risk or the reality of not being able to respond any other way. If you passively accept the risk, you do nothing to prepare for the consequences. But if you actively accept the risk, then you set aside some contingency reserve to prepare for the consequences, should that risk occur. We've touched on the response strategies for dealing with negative risk, so now let's turn our attention to dealing with positive risk. The following are response strategies for dealing with positive risk. We have risk exploitation, risk enhancement, risk sharing and again we have risk acceptance. Risk exploitation or exploiting a risk is similar to the avoidance strategy of negative risks. Here we want to guarantee that the risk does occur. It takes the probability up to one hundred percent, meaning that we want to make sure it happens. With both strategies, that's exploitation and avoidance, notice that we're eliminating the uncertainty attached to the risk, guaranteeing the outcome. Risk enhancement or enhancing a risk is a strategy similar to mitigation except here we increase the probability and or the impact. We'll choose this strategy when exploiting a risk as either not possible or just not feasible. Risk sharing is next and this one is similar to risk transference. Here we also involve a third party. In some cases we may not be able to take advantage of an opportunity on our own and instead we'll benefit from creating a partnership or joint venture to help make that risk happen. The benefit of the risk is shared between the two parties. And again here we have risk acceptance. This strategy is used in the same way as we saw with negative risk. Through the process of risk response planning, a risk owner should be assigned. This individual is responsible for keeping an eye on the risk and looking for risk triggers. It's not possible for the project manager to monitor all the risks alone and it isn't efficient. The risk response strategies, the risk owners and other information should be detailed within the risk register. This document continues to grow and it should be a reference point for everything about the identified risk. As a refresher, remember that this document is different from the risk management plan, which is simply a guiding plan and a how-to plan. The final thing that I'd like to address in this movie is the contingency plan. Contingency plans are implemented when a risk trigger has occurred, as opposed to implementing them immediately. A risk trigger is an event that indicates either a risk is about to occur or has already occurred, calling for the execution of a plan. We touched on quite a bit with risk response planning. Be sure that you feel comfortable with the various risk response strategies and the basics of what a contingency plan is and always update this information within the risk register. And this closes out our review of risk response planning and the risk response strategies that encompass this process.