Contingency Planning and Risk • Leadership Thoughts Blog
Every business needs a risk management plan, whether it is as simple as purchasing liability insurance or so complex as to require full-time risk managers to. Resources for policy making. Risk Analysis and Contingency. Planning. In the context of . Should be agreed between risk assessors and managers early in. Explain the relationship between contingency planning and risk management.( words) In an organisation, a risk management can be involved in.
It is the action to cure risk after it happens 2 It is the first level defense for high exposure risks.
Contingency Plan vs Mitigation Plan
It is the fallback plan for the high exposure risks. The actions will be planned in advance but certain warning signs will be under monitoring and actions will be taken when the warnings signs are at sight.
To apply for accident insurance is the contingency plan.
Pakistan Super over in T20 World Cup There is one small interesting example to show the importance of the mitigation plan. In super over, it was a tied match between India and Pakistan.
Contingency Plan Vs Mitigation Plan
It was the first time the super over rule was implemented in cricket history. It is similar to a soccer penalty shoot-out. Cricketers from each team need to bowl and target the stumps. Pakistan bowlers missed all the bowl-out targets but India targeted each and every ball.
The clash was clinched by India after a tense bowl-out. Risk Forecasting The first step in risk assessment is determining the quantity and level of risks that a business faces.
Measure each of these threats based on how likely they are to occur and how much damage they could do to the business.
There are several techniques for identifying risks including group brainstorming, interviews, surveys, root cause analysis, review of past accident reports, SWOT Strengths, Weaknesses, Opportunities and Threats analysis and diagramming. Composite Risk Index The standard formula for risk assessment is that risk equals the probability of an event multiplied by the cost of the event.
Each identified risk can be rated on a scale of one to five, with one being the least likely to occur and causing the least damage and five being the most likely to occur and causing the most damage.
All risks can then be sorted into low, medium or high depending on the rating. The Contingency Chart If you intend to use the contingency chart to map risks and mitigating actions do so with the project team or business during a risk workshop see How to Manage Project Risk. The contingency chart helps to map the risks associated with a project or service area by listing the things that could go wrong, including the more likely possibilities, if a risk materialises.
If you are familiar with decision theory you will recognise that I am describing the decision tree. However, in the case of the contingency chart the degree of sophistication normally associated with a proper decision tree is not necessary. Its purpose is simply to help you think through the alternatives and arrive at options for dealing with project or business risk.
Contingency Planning and Risk
Beginning with the most significant risk place a Post-it note at the top of a flip-chart. Next consider what happens if the risk materialises and jot these down on a new level. Sequentially brainstorm until enough ideas are generated. Finally, for each eventuality consider both countermeasures and contingencies. Countermeasures What can you do to tackle the risk?
What can you do to reduce the level of risk?