Mitigation Contingency Work Around plan

Types of RISK:

Residual Risks
Residual risks are those risks that are expected to remain after implementing the planned risk response, as well as those that are deliberately accepted.

For example, let’s say you are constructing a building in an earthquake-prone zone. You design the building by assuming the highest degree of earthquake that can happen is 6 on the Richter Magnitude Scale. But what if an earthquake happens at 7 on the Richter Magnitude Scale?

In this scenario, the building might collapse. This is an example of residual risk.

Secondary Risks
Secondary risks are those risks that arise as a direct outcome of implementing a risk response of an identified risk.

For instance, assuming you are constructing a building, and for security reason, you installed electrical wire at the top of the boundary wall. But what will happen if someone accidentally touches the electrical wire, or the electricity passes through the wet wall during rain?

They will get an electric shock. This is an example of a secondary risk.

Known-Known -> Known Risk - Known Impact
Have a mitigation plan which reduces either the Probability of occurrence or level of Impact. E.g build this plan into design, development, QC, process, skill set such that this Known Risk is mitigated as much as possible.

Known-Unknown -> Known Risk - Unknown Impact
Try to build a mitigation plan to the best possible extent. Have a Contingency Plan. E.g. add buffer to schedule &/or cost essentially consume project Contingency Reserves.

Unknown-Unknown -> Unknown Risk - Unknown Impact
Unknown risks are unknown; they are not known until they happen. You cannot make a response plan for these risks, and you cannot manage them proactively since they are not identified during the planning phase. Unknown risks are managed through the workaround, and to manage these kinds of risks, you will use the management reserve.

Mitigation Plan

PMBOK®  Guide Fifth Edition defines risk mitigation “Risk mitigation is a risk response strategy whereby the project team acts to reduce the probability of occurrence or impact of a risk.

It is important to understand that the aim of Risk Mitigation is to bring down the risk exposure within the acceptable threshold limits. The risk exposure is the function of the probability of occurrence of the risk and the impact of this risk on the project. Now, you need to understand, since, mitigation strategy is all about taking advance and proactive actions, the probability of occurrence of risk and its impact is identified and calculated at an early stage so as to prevent the foreseen damage to the project. In short, risk Mitigation follows ‘Prevention is better than cure” dictum.

Contingency Plans

Risk responses identified using contingent response strategy is called contingency plans.

PMBOK®  Guide Fifth Edition defines Contingent Response as “Some responses are designed for use only if certain events occur.

Contingency responses are the ones that get executed only when certain unwanted events occur. You do not execute contingency responses unless you see a warning sign (Trigger) that some risk is about to occur. Now, take note we only execute contingency responses when sufficient warning signs are given. It is mandatory to track and define the triggers of the contingency response.

It’s often observed that test takers consider these two risk plans as mutually exclusive, which however is not the case. At times, you may have to plan both the mitigation risk response and the contingency response alongside. In such urgent  situations, you have to make a proactive plan of actions to reduce the probability and impact of the risk and also stay prepared with the contingency plan and monitor triggers or warning signs in case the risk is inevitable.

You do not necessarily make both of these plans for all the identified risks. Instead the contingency plans are made for the risks which are under your threshold and flashes enough warning signs in advance.

Here is an  Examples to illustrate the case for both the risk responses:

Risk:

You are going to address a gathering of professionals, if the car tires get busted than it will result in delay of twenty minutes and you may miss your speaking slot.

The Mitigation Plan could be:

You take one car along, someone follows you, and in case there is any problem in the car you are traveling you change the car.

The Contingency Plan could be:

You keep some buffer time and if something happens to car tires, you change them and since you have timed buffer you still reach on time.

- See more at: http://www.izenbridge.com/blog/know-the-difference-between-mitigation-plan-and-contingency-plan/#sthash.RjumKFn4.dpuf

Contingency Plan: Contingency Plan describes the various specific actions that will be taken if the risk occurs, and these actions are carried out at the time of risk occurrence. A Contingency Plan is developed in the Planning Process for the identified risks, and it clearly defines the specific actions to be taken when a risk is about to happen or has happened.
For example, you planned that if the rain falls you will cover the construction consumables (materials) that are kept in open ground with a plastic sheet once you see the cloud movement. You further added that if the rain starts falling suddenly without giving any prior sign, you will bring in the blower and/or vacuum pumps to dry the wet consumables after the rain stops.



Fallback Plan:
Fallback Plan is a next step plan after the Contingency Plan. It is implemented when the Contingency Plan fails, or is not fully effective (in other words we can say that the Fallback Plan is generally made for Residual Risks). The Fallback Plan is also a part of the project management plan and it clearly defines the cases which actions have to be taken or need to be implemented.

Let’s say that in above given example, the rain continued to fall for a very long time – longer than you anticipated – which causes the consumables to be not usable any more. In this case, you will implement the Fallback Plan which says that once the rain stops, clean the site and procure new consumables from an identified supplier, and start the work.

Work Around Plan: 

As per the PMBOK Guide fifth edition, workarounds are responses that were not initially planned, but are required to deal with emerging risks that were previously unidentified or accepted passively.

Put more simply, workarounds are responses to any unidentified risks that occur during your project execution. 


In case even after the Mitigation plan and Contingency plan is implemented a Risk is existing then implement the Fallback Plan.

Just because the Mitigation &/or Contingency plan were implemented a new Risk would emanate. This Risk is called Secondary Risk. If the Mitigation &/or Contingency plan were not implemented this Risk would not have happened.

For Accepted Risk or Unknown Risks for which no planning was done a Workaround Plan is implemented.

Risk Accept-Avoid-Mitigate-Transfer

How to Manage Project Risks

Here's the scenario. You just bought a brand new car! It's the car you've been wanting for years and there it is, tucked safely away in your garage. It will be fun to show everyone at work the next morning. At the thought of parking at work, you become concerned about the paint getting scratched. What options do you have in dealing with this risk?

Accept the Risk of Your Car Being Scratched

An obvious response is just to accept the risk. It won't change what time you go to work or where you park. You will just hope that nobody parks too close or rubs up against your brand new car. In the event that somebody does scratch it, you'll cross that bridge when you come to it. Before that, you're not even going to think about it.

Avoid the Risk of Your Car Being Scratched

Don't like the idea of accepting the risk? Another choice is to avoid the risk altogether. You can do this by not going back to work, and keeping the car in the garage. Never letting your car see the light of day will nearly guarantee that your car won't be scratched.

Mitigate the Risk of Your Car Being Scratched

If avoiding risk is not an option, you could just lessen the chances of the risk occurring. Rather than leave your house when the traffic is the heaviest, you could leave an hour later to put more space between you and the cars around you. When you do make it to work, you could also park WAY over in the corner about a mile from the office where nobody else parks. Both steps would greatly reduce the risk of your new car being scratched.

Transfer the Risk of your Car Being Scratched

A final choice is to put someone else's car at risk of being scratched. That's right, call a taxi! You can pay someone else to remove the risk to your new car, and transfer it to someone else. They can decide how they want to handle the risk.

Types of Risk

Types of Risk

• Positive Risk - If it occurs there could be Opportunities
• Negative Risk - If it occurs there could be Threats
• Known Risk - Risks that have been identified and analyzed. Use Contingency Reserve.
• Unknown Risk - Unknown risks are not known until they happen. Use Management Reserve.
• Residual Risk - Risks remaining after implementation of planned responses (Mitigation Plan).
• Secondary Risk - Risk resulting due to implementation a risk response. If the risk response was not taken, the secondary risk would not exist.

Known-Known -> Known Risk - Known Impact
Have a mitigation plan which reduces either the Probability of occurrence or level of Impact. E.g build this plan into design, development, QC, process, skill set such that this Known Risk is mitigated as much as possible.

Known-Unknown -> Known Risk - Unknown Impact
Try to build a mitigation plan to the best possible extent. Have a Contingency Plan. E.g. add buffer to schedule &/or cost essentially consume project Contingency Reserves.

Unknown-Unknown -> Unknown Risk - Unknown Impact
Unknown risks are unknown; they are not known until they happen. You cannot make a response plan for these risks, and you cannot manage them proactively since they are not identified during the planning phase. Unknown risks are managed through the workaround, and to manage these kinds of risks, you will use the management reserve.
 
Residual Risks: Residual Risks are those risks that are expected to remain after planned responses (Mitigation Plan) of risks have been taken, as well as those that have been deliberately accepted.
For example, let’s say you are constructing a building in an earthquake prone zone. You constructed the building by assuming that the highest degree of earth quake that can happen is 6 on Richter Magnitude Scale. But what if an earth quake happens at 7 on the Richter Magnitude Scale? The Building might collapse.

Secondary Risks: A secondary risk can be defined as a risk created by the response to another risk. In other words, the secondary risk is a consequence of dealing with the original risk. A secondary risk is a risk that arises as the result of implementing a risk response. If the risk response was not taken, the secondary risk would not exist. Example
You are planning the annual employee recognition event. It will be an outdoor luau-themed event. Because there is a chance of rain, you decide to mitigate the risk of the employees getting wet and not having fun by putting up a tent.
There is still some residual risk that the employees will get wet walking from the parking lot to the tent.
There is also a secondary risk that someone will trip over the tent poles and get injured.

For identified Risk project creates Mitigation Plan.
Even after having put in the Mitigation plan the Risk happens. This is called Residual Risk then while the Residual Risk is happening or triggered implement the Contingency Plan.

In case even after the Mitigation plan and Contingency plan is implemented a Risk is existing then implement the Fallback Plan.

Just because the Mitigation &/or Contingency plan were implemented a new Risk would emanate. This Risk is called Secondary Risk. If the Mitigation &/or Contingency plan were not implemented this Risk would not have happened.

For Accepted Risk or Unknown Risks for which no planning was done a Workaround Plan is implemented.