Executing the risk response plan(s) is a crucial part of risk management, particularly in the context of the PMI Risk Management Professional (PMI-RMP) exam. It involves implementing the necessary strategies and mechanisms that have been developed to mitigate, accept, transfer, or avoid risks that have been identified during the risk identification and assessment process.
Addressing Risk Responses
The PMI-RMP exam emphasizes the necessity of addressing different types of risks with varying responses depending on their potential impact and likelihood. Here are four common types of risk responses:
- Mitigate: To mitigate a risk means to lessen its potential impact or the chances of it occurring. This can be achieved by implementing a backup plan or introducing different operational adjustments.
- Accept: Accepting a risk involves acknowledging it without taking any immediate action – it’s a passive approach, but sometimes it is the most economical or efficient choice. This strategy requires having a contingency plan in place, however, in case the risk becomes a reality.
- Transfer: Transferring a risk involves passing it onto another party, typically through insurance or outsourcing. The responsibility of managing the risk is thus given to someone else, but it does not eliminate the risk altogether.
- Avoid: Avoiding a risk means changing plans or operations to completely bypass the risk. This is usually the most drastic response and is utilized when the risk’s potential impact is too significant to address in any other way.
Execution of Risk Response Plans
Once a risk response strategy has been chosen for each recognized risk, the next step is to execute these plans, which generally consists of the following components:
- Assigning Ownership: Every risk that has been identified and assessed needs to have an assigned owner who will be responsible for implementing the response strategy and dealing with any outcomes related to the risk.
- Implementing Risk Responses: The risk responses are then put into operation, each according to its own methodology and guiding principles.
- Communication: It’s important to maintain clear and transparent communication about each risk, its response plan, and any changes or updates along the way. This includes defining reporting lines and making regular status updates in accordance with these lines.
- Tracking and Monitoring: Throughout the execution of a risk response plan, it’s critical to monitor and review the plan’s progress and effectiveness. This will help identify any deviations from the plan early and allow for timely adjustments if necessary.
Example
To give a practical example, imagine working on a project with a critical delivery deadline. One identified risk could be a potential delay in product delivery due to supplier issues. The chosen strategy could be to mitigate this risk by procuring an alternative supplier as a backup. The execution of this risk response would involve contacting and securing a backup supplier, communicating this plan to relevant project team members, and monitoring the main supplier’s performance regularly while keeping the backup supplier informed of any potential need for their services.
Conclusion
A rounded comprehension of risk response planning and execution forms an integral part of the knowledge required to excel in the PMI-RMP exam. The key lies in being able to effectively correlate risk types with optimum response strategies, and ensuring that these strategies are implemented, communicated, and tracked responsibly. By grasping these fundamentals, candidates will be well equipped to manage risks in any given project scenario.
Practice Test
True or False: The risk response plan(s) should be developed during the onset of the project.
- True
- False
Answer: True
Explanation: Risk response planning should be done during the initial stages of the project to effectively identify, analyze, and respond to potential risks.
What is the purpose of executing a risk response plan?
- A. To identify potential risks
- B. To ensure that risks are properly responded to
- C. To analyze risk impact
- D. To close the project
Answer: B. To ensure that risks are properly responded to
Explanation: The main aim of executing the risk response plan is to ensure that identified risks are actively and correctly responded to.
True or False: Risk response plans need to be revisited and updated throughout the project lifecycle.
- True
- False
Answer: True
Explanation: With changes in project status or environment, risks can evolve or new risks can emerge. Therefore, it’s important to continuously revisit and update the risk response plans.
What is the final step in risk response planning?
- A. Identifying risks
- B. Analyzing risks
- C. Monitoring risks
- D. Documenting risks
Answer: C. Monitoring risks
Explanation: While all these steps are part of the risk management process, monitoring risks is the final step in risk response planning as it involves managing risk throughout the project lifecycle.
A risk response plan needs to be based on the level of ____________.
- A. Authority
- B. Risk impact
- C. Training
- D. Confidence
Answer: B. Risk impact
Explanation: The response plan must be proportional to the level of risk impact on the project.
True or False: Executing the risk response plan(s) is primarily the project manager’s responsibility.
- True
- False
Answer: True
Explanation: Though it involves collaboration, primarily the project manager is responsible for executing the risk response plan(s).
Who should be involved in developing the risk response plan?
- A. Only the project manager
- B. Only the risk manager
- C. Project team and key stakeholders
- D. Only the project team
Answer: C. Project team and key stakeholders
Explanation: Developing a comprehensive risk response plan requires the input and expertise of a diverse team including key stakeholders.
True or False: Risk responses should only address negative risks or threats.
- True
- False
Answer: False
Explanation: Risk responses should address both threats and opportunities. An effective risk response plan covers strategies for both.
The risk response plan should be detailed enough to determine ______________.
- A. Who is responsible for what
- B. The start date of the project
- C. The capacity of the team
- D. The budget of the project
Answer: A. Who is responsible for what
Explanation: It’s important that the risk response plan details roles and responsibilities for risk management activities.
True or False: In executing a risk response plan, there should be a fallback plan if the primary response proves not to be fully effective.
- True
- False
Answer: True
Explanation: Having a backup or fallback plan is a standard part of risk management and helps to ensure that the project can still be successful if the primary plan does not work as anticipated.
The effectiveness of risk responses should be:
- A. Assumed
- B. Discussed
- C. Forgotten
- D. Monitored
Answer: D. Monitored
Explanation: Risk responses need to be monitored to ensure their effectiveness in mitigating the impacts of risks on the project.
True or False: The risk response plans should be communicated to all project team members.
- True
- False
Answer: True
Explanation: For effective implementation, risk response plans should be communicated to all team members. This ensures everyone is aware of their roles and responsibilities in managing project risks.
Which of the following is not part of a risk response plan?
- A. Risk identification
- B. Risk response development
- C. Risk monitoring
- D. Project closure
Answer: D. Project closure
Explanation : Project closure is not part of a risk response plan, it’s a phase in project management.
Risk identification, response development, and monitoring are all integral parts of risk response planning.
The goal of executing a risk response plan is to minimize the _______________ of negative risks.
- A. Probability and impact
- B. Awareness
- C. Timeline
- D. Costs
Answer: A. Probability and impact
Explanation: The main objective of any risk response plan is to reduce the likelihood and/or impact of negative risks on the project.
True or False: If a risk does not occur, the risk response plan was wasted effort.
- True
- False
Answer: False
Explanation: Planning for risks ensures preparedness in the event they do occur. Risks are uncertain; the aim is not for them to occur but to manage them effectively if they do.
Interview Questions
What is the purpose of having a risk response plan?
The purpose of a risk response plan is to outline the strategies for managing and mitigating potential threats to a project or an organization. It is intended to ensure that everything possible is done to minimize the negative impact of these threats if they were to occur.
What are the key elements in executing a risk response plan?
The key elements in executing a risk response plan are identification, assessment, response development, response control and monitoring, and updating the risk log.
What is a risk owner’s role in executing a risk response plan?
A risk owner’s role in executing a risk response plan is to monitor their assigned risks, implement the agreed-upon risk response strategies, and inform the risk management team about any changes in risk status or effectiveness of the risk response.
What are some common risk response strategies used in risk management?
Common risk response strategies include risk avoidance, risk acceptance, risk mitigation or control, and risk transfer.
What is the role of communication in executing a risk response plan?
Communication is essential in executing the risk response plan. It ensures all stakeholders, including team members and management, are aware of the risks and the steps that are being taken to address them. Additionally, good communication promotes transparency and fosters a culture of openness regarding risk management.
When monitoring risk responses, what key elements should be tracked?
When monitoring risk responses, key elements to track include the effectiveness of the response strategies, changes in risk status, newly identified risks, and whether the risks are still relevant or need to be reassessed or updated.
What does it mean to implement risk responses when it comes to project risk management?
Implementing risk responses refers to taking the agreed-upon steps to minimize the impact of a potential risk. This can involve a range of actions, from changing project plans to reallocating resources, depending on the nature of the risk and the chosen response strategy.
In what order should risk responses be implemented according to PMI?
PMI does not provide a specific order for implementing risk responses. Instead, it recommends prioritizing risks based on their potential impact on the project objectives, and executing the response plans accordingly.
What should a project manager do if a risk response plan is not effective?
If a risk response plan is not effective, the project manager should revisit the risk management planning process. This includes identifying the root cause of the issue, re-assessing the risk, revising the response plan, and ensuring that it is implemented effectively.
What is the purpose of updating the risk register after executing the risk response plan?
Updating the risk register after executing the risk response plan serves several purposes. These include keeping track of changes in risk status, assessing the effectiveness of the risk response strategies, and maintaining a record of the steps taken to manage the risks. This information is essential for continuous learning and for risk management in future projects.
How often should a risk response plan be reviewed and updated during a project’s lifecycle?
A risk response plan should be reviewed and updated on a regular basis throughout the project lifecycle. The exact frequency depends on the nature of the project, the environment in which it operates, and the level of risk involved, but it should typically be done at least at each major phase or milestone of the project.
What is the importance of documenting lessons learned in executing a risk response plan?
Documenting lessons learned in executing a risk response plan is important for continuous improvement in risk management. It helps identify what worked, what did not, and how the risk management process can be improved for future projects. It also helps in building a knowledge base for risk management within the organization.
What role does the project risk management team play in executing the risk response plans?
The project risk management team is typically responsible for overseeing the execution of the risk response plans. They coordinate with risk owners to track progress, ensure that risk responses are implemented as planned, monitor the effectiveness of the risk responses, update the risk register, and report on risk management activities to stakeholders.
How does technology assist in executing the risk response plan?
Technology can assist in executing the risk response plan in several ways. These include automated monitoring and reporting of risks, easy updating and reviewing of risk registers, and facilitating communication and collaboration among team members and stakeholders. It can also help in developing and analyzing scenarios for better risk response planning.
What does PMI suggest about residual risks after the implementation of risk response?
PMI suggests that residual risks, which are the risks that remain after response strategies have been applied, must be noted and documented. They should be reassessed and new response plans should be developed if necessary. It aids in handling possible threats that could affect the project in the future.
extutorials.com