From the course: Project Management Foundations: Risk

Project threats

From the course: Project Management Foundations: Risk

Project threats

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- As project managers, we want to decrease exposure to negative risks, also known as threats. Threats is a very scary word, but with the right actions, you can reduce the risk of these nasty threats impacting your project. According to the Project Management Institute, there are five threat strategies to think about when addressing a given threat or risk event. The first strategy is to avoid the threat by eliminating it completely. Do this by changing project scope and removing whatever may trigger the threat. For example, if you're building a house and have a section of unlevel ground, you might modify your plan so you only build on flat areas of your property. Another threat strategy is to escalate. This strategy is used when the threat is outside the project scope or the proposed risk response would exceed the project manager's authority. For example, if there's a pending corporate merger, the best option is to escalate to your sponsor and senior management so they can help with the risk mitigation for your project. Transfer is a strategy where you give the problem to someone else but in an acceptable way to reduce risks. Threat ownership is shifted to a third party like an expert vendor to deliver a product, manage the risk, and sustain the impact if the threat occurs. Another example of transferring risk is purchasing insurance to mitigate the risk of a flash flood impacting your construction site, or outsourcing scope that's beyond your team's capabilities. Next, the most common threat strategy is mitigate. This is when you do things to reduce the probability of the threat occurring and/or reduce the impact on your project if it does occur. For example, you could hire a consultant to advise project team members, backfill a key business resource to free up the business resource for project activities, or perform additional testing of your deliverables. The last threat strategy is to do nothing. You accept the existence of a threat as is. This would be appropriate for risks that have a low probability of occurring or won't impact your project very much. When developing risk mitigation activities, they'll likely be accepted if they're realistic and cost effective, necessary given the magnitude of the threat, agreed to by relevant stakeholders, assigned to an owner, and it has the potential to reduce the impact or probability of the risk occurring. An item to note, throughout the project lifecycle, you can change the strategy for a given threat. You can accept the risk at the beginning of the project, but if the potential impact or probability increases, you can apply a different strategy to address the threat. To help you better manage threats, I've included a threat strategy matrix in the exercise files. Understanding and implementing these strategies to address threats will equip you to reduce your overall risk and probably keep most people from being scared by project threats.

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