One possible response to a threat is to just accept it. Acceptance is a suitable reaction when a threat is small, unavoidable, or unknown — or when it’s impossible to avoid, transfer, or mitigate.
When you choose acceptance, you may simply hope for the best and plan appropriate responses to any of the repercussions that arise. Acceptance can be either passive or active.
Passive acceptance involves doing nothing unless a threat arises, then you try to tackle the consequences. For example, bad weather can cause delays to construction projects.
Your planning team may try to schedule major outdoor tasks for…
Another way to respond to threats is to mitigate their effects. When you mitigate a threat you reduce the likelihood that it’ll occur — and reduce the impact it’ll have if it does occur — to acceptable levels.
Mitigating threats is a good option when avoiding or transferring them isn’t possible, or when these responses are too expensive. Mitigation is the risk response used most often by managers.
There are a number of techniques you can use to mitigate threats.
One way is to adopt less complex processes. Imagine you’re the manager responsible for distributing charity funds.
Your risk analysis…
Transferring the risk is one way to respond to a threat. Instead of trying to avoid or eliminate risk, you assign ownership of the risk to a person or organization who can deal with it better. This third party may take on all or part of the risk.
Organizations frequently transfer risk in order to manage financial risks. However, this service is usually costly. Before you take this approach, consider the budget you’re operating with and carry out a cost estimate.
There are various ways to transfer responsibility for the threats you face at work. For example, you can buy…
To deal with a threat effectively, you must understand what type of threat it is and how severe it is. Once you understand the threat, you can select the most effective response. You could choose to avoid the threat, eliminate the cause of the threat, or adjust your plan so that the threat no longer applies.
If a threat has a high probability of occurring — and is likely to impact your activities negatively — your first reaction should be to try to avoid it. This approach works best when you’re fairly certain what the outcome of the threat will…
The first stage of a failure mode and effect analysis, or FMEA, involves assigning rankings for severity, occurrence, and detection to the effects of each risk your organization or project faces.
Each ranking uses a 10-point scale, with 1 being the lowest ranking and 10 the highest. Everyone on your team must be on the same page to ensure consistent rankings, so always make sure to establish the scales before you start the ranking process.
Begin by assigning a severity ranking. This ranking estimates how serious the effects would be to your project if a potential risk — or failure…
How to decide which ones will benefit you and your organization the most
Even if your organization is the biggest in the business, chances are it still won’t be able to pursue every opportunity that presents itself. So how do you decide which ones will benefit you and your organization the most?
You can assess the value of each apparent opportunity by asking the right questions. Get input from everyone working on your project when answering these questions and then you can determine which opportunities are worth pursuing.
The first question to ask when weighing opportunities is “What events would…
Opportunities and threats can be assessed separately, but you can also evaluate them together using some combined assessment techniques.
One of the combined techniques is known as SWOT analysis — short for strengths, weaknesses, opportunities, and threats analysis. In SWOT analysis, you specify a company’s primary objectives and identify the positive and negative factors, both internal and external, that will contribute to meeting those objectives.
This analysis matches your organization’s strengths to external opportunities and also looks for ways to turn weaknesses and threats into strengths and opportunities. …
The opportunities and threats your organization faces can be assessed separately using different techniques. The most common techniques for assessing opportunities are opportunity analysis, market surveys, research and development, and test marketing.
In opportunity analysis, you ask a set of questions designed to increase the chances of an opportunity occurring. It’s a process that enables you to identify where opportunities exist in your organization so you can cut costs and save time or other resources.
Market surveys can take the form of consumer questionnaires, focus groups, and online surveys, all of which can help your organization to find where new…
Do you ever find yourself heading into work asking yourself “What’s going to happen today?” or “How is this plan going to work out in reality?” Don’t worry — this makes you a member of a pretty big club.
After all, uncertainty is a part of every business environment and most business decisions entail risk. Assess those risks and take action where necessary to keep your business on the rails and moving forward.
Before engaging in risk assessment, however, familiarize yourself with some key concepts. The first thing to recognize is that a risk can be a threat or an…
Getting participants to stick to ground rules is a common problem in brainstorming sessions, but it isn’t the only challenge that can arise. There’s also the tricky human factor to consider — specifically different personality types and group dynamics.
You may encounter dominant participants, who may use the session for their own agenda and prevent others from contributing, and “groupthink,” which causes people to go along with the group.
You may also see digression, which can take attention away from the real risks, and quiet group members, who sometimes get excluded from the discussion. …
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