Risk Mitigation

Risk mitigation refers to the process of planning and developing methods and options to reduce
threats or risks to project objectives. A project team might implement risk mitigation strategies to
identify, monitor and evaluate risks and consequences inherent to completing a specific project, such
as new product creation. Risk mitigation also includes the actions put into place to deal with issues
and effects of those issues regarding a project.

Risk Acceptance

The acceptance strategy can involve collaboration between team members to identify the
possible risks of a project and whether the consequences of the identified risks are acceptable.
To identifying risks and related consequences, team members may also identify and assume
the possible vulnerabilities that risks present. This strategy is commonly used for identifying
and understanding the risks that can affect a project’s output, and the purpose of this strategy
helps bring these risks to the business’ attention so everyone working on the project has a
shared understanding of the risks and consequences involved.

The accept strategy can be used to identify risks impacting cost.

For example:

A project team might implement the accept strategy to identify risks to project budget and
make plans to lower the risk of going over budget, so that all team members are aware of the
risk and possible consequences.

Avoidance of Risk

The avoidance strategy presents the accepted and assumed risks and consequences of a
project and presents opportunities for avoiding those accepted risks. Some methods of
implementing the avoidance strategy is to plan for risk and then to take steps to avoid it. To
mitigate risk on new product production, a project team may decide to implement product
testing to avoid the risk of product failure before final production is approved. 

Avoiding cost issues is another implementation of this strategy.

For example:

A project team may outline all anticipated costs as well as account for any costs that could
come up so that the consequences of going over budget can be avoided.
Risk Limitation

Team members may also implement a control strategy when mitigating risks to a project.
This strategy works by taking into account risks identified and accepted and then taking
actions to reduce or eliminate the impacts of these risks.

For example:

A project team might implement control methods that can detect possible issues with project
budget. The controls for risk mitigation might include focus on management, the decision-
making process or finding flaws in the funding for the project before issues can arise. This can
also give a project team insight into how funds are being delegated, and if there is a risk of
going over budget, the team can identify this before it happens and take measures to control it
such as reducing spending or eliminating a resource that could prove too costly for the project.

Transference of risk

When risks are identified and taken into account, mitigating the consequences through
transference can be a viable strategy. The transference strategy works by transferring the
strain of the risk and consequences to another party. This can present its own drawbacks,
however, and when an organization implements this risk mitigation strategy, it should be in a
way that is acceptable to all parties involved.

Transference of consequences regarding cost can include holding accountants and financial
advisors accountable for issues in budgeting.

For Example:

A project that goes over budget can include higher production costs and funding for materials.
If the consequences are shifted to the finance teams responsible for tracking budget,
production managers and team members can focus on their responsibilities while the finance
team takes measures to fix cost issues.