Planning risk responses

Planning Risk Responses

What is a risk?

The term risk defined by the dictionary in loose terms is the possibility of an injury or loss. This definition emphasizes the negativity that is often associated with risk and suggests that uncertainty is associated with risk. Project risk management involves understanding the potential problems that can occur in a project and how they can hinder the success of the project. While there are negative risks there are also positive risks. These risks lead to good outcomes. In the Agile environment, while working on a project there is uncertainty which can have a negative or positive impact on the achievement of a project's objectives.

Introduction to planning risk responses

Once these risks have been identified, the project manager must develop an appropriate response to the risks. To develop a risk response, you need to develop options and define strategies to reduce negative risk and improve positive risk. There are different responses and strategies to go through when dealing with negative risks and different strategies for positive risks.

Risk management in Agile

Risk management is the third step in the agile risk management process. This phase is preceded by risk identification and risk assessment, followed by risk assessment. Once the risk is identified, it becomes an issue. Risk management is at the core of agile project management. Meetings in the preparatory phase of the sprint plan offer many possibilities for mitigating / avoiding the realization of business, technical, and logistic risks. If you need to include a risky story in your sprint, or if you are concerned about the alternative risk of confusion, you need to be able to:

• Consider potential results

• Make potential results work in our benefit

Tim DeMarco and Tim Lister describe four different risk reactions in their book Waltzing with Bears. You can use these categories to form the structure of your risk board. This is a tool that allows you to track progress based on agreed response activities. The four different risk reactions are as follows:

• Mitigate

• Avoid

• Evade

• Contain

Placed on top is an image that depicts the agile risk management process. It highlights the different steps that take place in the Agile lifecycle and walks you through the overall process. From reviewing during the retrospective to identifying during the daily scrum or retrospective or sprint review or sprint planning(these are all different meetings/processes in the overall agile process) to assessing the situation. Understanding the impact of the risk and the likelihood of that risk to finally responding to the risk through the steps highlighted and on and on.

As a scrummaster or project manager, being aware of how to navigate through different risks that arise and dealing with the appropriate response to these risks can make or break the project/product. There are different strategies as discussed below to navigate through these risks whether it be positive or negative.

The five basic negative risk response strategies are:

• Risk Avoidance: Eliminating the root cause of a specific threat. An example would be using familiar software, or hardware instead of trying to use a new software or hardware as using something with unfamiliarity could be a risk.

• Risk Acceptance: Accepting the consequences if the risk arises. An example would be having a back up plan if the first plan fails.

• Risk Transference: Shift management risk and liability outcomes to third parties. An example would be having a warranty that guarantees you protection for a specific product/software.

• Risk Mitigation: Reducing the impact of risk events by reducing the probability of occurrence. An example would be to use proven technology in your project, subcontracting.

• Risk Escalation: Letting a person of higher authority know. Escaping the matter to a person of a higher level when out of scope.

The five basic positive risk response strategies are:

• Risk Exploitation: Doing what it takes to make sure the positive risk goes through. An example would be holding some sort of public event promoting the product.

• Risk Sharing: Transfer ownership of risk to another party. An example would be having some sort of partnership to share responsibility for the project.

• Risk Enhancement: Rescale opportunities by identifying and maximizing the key factors of positive risk.

• Risk Acceptance: the project team takes no action on the risk, it applies to positive risk.

• Risk Escalation: notifying a person of higher authority applies to positive risks as well.

Outcomes of risk response planning

Key outcomes of the risk response plan include requesting updates and changes to the project management plan and other project documents. If your risk response strategy requires additional work, resources, or time to complete, you may need to update your project management plan and related plans. Risk response strategies often change WBS and project schedules, so the plan that includes this information should also be updated. Risk Response Strategy also provides updated information for risk registration by explaining risk response, risk owner, and status information. Risk response strategies often include identifying residual and secondary risks, as well as emergency response plans and reserves, as described above. Residual risk is the risk that remains after all response strategies have been implemented. Secondary risk is the direct result of implementing a risk response.

Implementing risk responses

The main execution process performed as part of project risk management is the risk response implementation defined in the risk response planning process. The main output includes change request and project document updates (that is, problem logs, lessons learned, project team tasks , risk registration, and risk reports). It is important to note that being proactive and taking the required steps to implement the strategy is crucial. Whether this be by the project manager took the time to understand the needs of the customer and relayed that information to the team during the sprint planning meeting, setting up a meeting to clarify the needs of the customer and clarify expectations. Taking these steps can prevent negative events or unknown circumstances to affect their implementing risk responses process.

Sources

Textbook: Chapter 11: Project Risk Management

https://agile101.wordpress.com/2009/07/27/agile-risk-management-risk-response-step-3-of-4/