Risk Mitigation
Why
Launching an innovation is a leap into uncertainty. A lot of things can go wrong and things can happen outside your team and organization.
The purpose of working with risk mitigation is to have a Plan B if something happens.
When
At the end of your business development phase and before the pitch and delivery of the business report.
How
A typical structure for risk analysis and planning risk mitigation is shown in the spreadsheet below:
- Risk - identify risks. What could happen that would have a negative effect on our success?
- Probability - how likely is it that it will happen? Rate 1 to 5 from highly unlikely to most likely.
- Effect - how serious is the effect on our business/project? Rate 1 to 5 from only minor effect to very serious effect.
- Overall importance - rate the importance of each risk. Could simply be an A, B and C-rating.
- Risk mitigation - desribe what you could do to prevent or mitigate the effects if the event occurs.
To identify risks you should check your PESTEL-analysis, Porters Five Forces analysis, SWOT-analysis or any information that you gathered through the course.
Focus on discussing risk mitigation for the most important risks.
Risks will often fall in one of the following categories:
- Technological risks - e.g. things that could go wrong in developing, testing and using your product.
- Market risks - e.g. things that could happen in the market like changes among customers or in the competitive landscape.
- Organizational risks - e.g. things that could happen in the team or in the organization behind the product and business.
- Financial risks - e.g. events that will affect your project financially like changes in customers ability and willingness to pay, changes in prices, availability of funding etc.
But basically much of your business model is based on assumptions assumptions, and any assumption may include a potential risk, if the assumption is wrong.
