Essential Strategies for Risk Management and Mitigation

Essential Strategies for Risk Management and Mitigation

Posted by in Leadership & Management, Science & Technology

One thing which always needs to be realized by entrepreneurs and businessmen is that risks and failures are inevitable. There is no way one can escape them in the real world where the major determinant factor is the personal choice of the general public which can change at any time. This change can be caused by any external factor and or due to the occurrence of any new trend.

The most important thing about failure is that it is one of those things which provides great opportunities for learning. This does not mean that one must not take enough measures to prevent it. Taking all essential measures to minimize the chances of any kind of risk is important otherwise, there is no chance that your business will flourish.

Let us assume that we have come up with a certain outline that determines the chances and magnitude of risk whether qualitative or quantitative. With time, money, and other significant resources we can overcome the risks or the effects which could otherwise be caused by any unfavorable situation.

What is Risk Mitigation?

Risk mitigation means that you are planning and developing opportunities and actions which will help in reducing the threats to the project itself or its objectives. Implementation of the mitigation process means that the strategies are being used to overcome any danger or risk, identifying any future risks, and evaluating the effectiveness of this risk management throughout the project.

Strategies for Risk Mitigation Handling

Here are some of the most sought-after strategies for risk mitigation which will be of great help especially for startups and new entrepreneurs who have limited knowledge as well as no experience of being in the market as a newbie.

Accept the Inevitability of Risk

Accepting the risk means that you have logged in the possibility of facing one and accepted the fact that it might happen. Now is the time to start thinking about the various possibilities with the help of which this risk can be overcome.

The smaller the risk is, the better it is to leave it undealt. This is because a lot of costs, time, and effort go into coming up with a risk management strategy so it is better not to put your essential resources into use. The minute issues can be left to deal with later along with issues of greater magnitude because that will save your cost and time. Dealing with smaller issues means that you are wasting your time.

On the other hand, when a huge risk arises then the risk management software is put into use and a strong strategy is used to overcome the issue. This is the time when petty problems can also be dealt with.

Avoid the Risk

This can happen through anticipating the risk and taking strong measures beforehand to avoid it. The program of any process must be flexible enough to accommodate any change in order to combat the risk factor. This change can be done by altering the budget or the funding of a particular program. Also, the schedule and even the technical requirements of any business can undergo a change, so that the chances of risk are minimized.

For example, if the finance department of your company is going through the annual review of all the finances then this definitely is not the time to give them a new responsibility. It is better to let them finish this task at hand for the whole month of December and engage them in anything new in the month of January.

Clearly Laying out the Expectations

A good project manager or team leader knows how to assign the duties to his whole team and clearly defines the goals and mission statement in front of his workforce. The team members should also know their individual responsibilities apart from the collective goals and must be guided thoroughly on how to meet them efficiently.

Tom Treanor from Wrike who holds the position of director of content marketing and social media says that it is critical to set up the structure in front of the key stakeholders and let all the information be transparent. This is because that is how you will ensure that there is no room for making a mistake. It is the ultimate duty of the team lead to clearly label the individual responsibilities, make people accountable for their work, consult all the aspects and problems, and be well-informed about the progress of the project.

Setting Up Earlier Deadlines

The creative director of The Security Awareness Company, Ashley Schwartau, says that setting up earlier deadlines helps him see if there are any errors and provides enough time to fix the mistakes before the actual deadline provided by the client is reached.

This not only gives enough time to thoroughly go through the project especially if it has been divided into chunks and being handled by various members of the team but also omits the chances of facing risk or worse, a failure.

Lack of Communication and Cooperation among the Team Members

There is a high chance of a risk if your team members are not well-coordinated with each other. A good project manager or team lead keeps checking with the team members if everything is going fine. If there are any personal or professional issues going on between the individuals then they need to be catered to as soon as possible because these differences can lead to a variety of other problems.

Keep a regular check with each member of your team and reach out to them on a personal level, so that you are able to solve their problems in a better way. This is one of the best ways of gaining the trust of the team and making them perform to the best of their abilities.

Collaborating with Team Members from Various Locations and Time Zones

This is the era of being mobile which means that collaborations are happening without any geographical or physical limitations. The collaborations are not limited to sending emails and sharing files but rather comprise of working together given the technical limitations.

There is a problem of collaborating together inefficiently online, therefore, there is a need to devise more appropriate methods of meeting the requirements. Having an efficient mobile collaboration medium minimizes the chances of risk and serves as a great risk mitigation source given the fact that there is constant supervision by the team lead. Josh Bauer who is the assistant director of Network Operations says that a mobile collaboration tool will be a game-changer for all the IT managers.

Monitor the Environment

It is very important to monitor the environment and the possible changes which might occur in it because they constitute a huge risk factor. To carry out any project, it is important to keep a check on all the external factors which in one way or the other affect it.

A plan must be created which has enough flexibility to accommodate any kind of change in the environment whether a key employee resigns or if there is a sudden change in the mood of any of the vital stakeholders which can hugely affect the working process. A plan which already has the capacity to accommodate such changes will not suffer no matter how great the magnitude of the problem is.

Transfer the Risk

Transference of the risk is one of the most common risk mitigation strategies because this means that you are just transferring the responsibility to someone who is willing to take it. The impact and management are transferred to someone who is more daring, capable, and willing to manage the project or fight the problem at hand.

A good example of this is the insurance companies that willingly take up the cost of any kind of damage done to your vehicle or property in return for the fixed amount which they receive from you. This way you transfer your burden to someone else who is more willing to take up the responsibility.

The Key to Success

Accept the existence of the risk and develop a strategy keeping in mind the requirements of the workforce and those of the stakeholders as well. This will ensure that the chances of risk are minimized and the project or the company does not suffer a significant loss.

Key Takeaways

  • The risk is always there and the best solution to overcome it is to realize its existence and try to avoid it.
  • Telling each employee his responsibilities and the kind of performance expected from him.
  • Setting up earlier deadlines to meet the actual one.
  • Effective communication and constructive collaboration amongst team members.
  • Monitoring the environment and various factors which might affect the project or the company.
  • Transferring the risk to a resource that is more capable of dealing with it and will be a winner in any kind of emergency situation.
  • Keeping a check on the progress of any project or on the working of the company.