Risk strategies: Risk likelihood Reduction and Consequence Reduction

This post focuses on the two second risk management strategies, which we introduced last week. Look at the lasts posts to get the full overview!

Risk Likelihood Reduction

For many kinds of hazard risk, it is possible to reduce the chances that they will manifest into even bigger risks. In such case, risk is addressed through a reduction in likelihood. Obviously, this is not practical or feasible for certain types of hazards such as bad weather. Other secondary risks, such as water in the fundament of the construction have several mitigation options available to manage, including controlled release or cover.

In international projects as an example, companies sign contract to lower the likelihood for disagreements before the actual work begins. 

Another way to reduce the risk likelihood would be enhanced training or applying a security patch. You can also reduce the likelihood by implementing controls. Controls that detect the root causing unwanted failures, that the team can avoid. This kind of control seeks to be found in the management or decision-making process. By improving the ability to find design flaws or to improve the accuracy of field failure rate prediction, you can improve the ability to make appropriate decisions concerning the risks in your project.  

To assign high-risk management activities to highly qualified project personnel. In this way the experts, who are used to run a high-risk business, can anticipate problems, and find better solutions. Companies also use diversification of knowledge by sharing skills and know-how across the supply chains to spread and reduce risks. This can, by advantage, be done through a RoC Drill which gather a group of diverse people. This should be done to have an independent, unbiased outside experts review the project’s risk plan before final approval.

Risk Consequence Reduction

The second and similar risk reduction goal, is to reduce the impact of hazard risk on humans, structures, the economy, the environment, or any combination of these. Measures that address consequences typically assume that the hazard is going to result in an even bigger risk, that will have an associated intensity. Such strategy is taken to ensure that the structure, collaboration, system, or other subjects protected by the mitigation strategy, is able to withstand an event without any, or with reduced, negative consequences. The risk levels of most hazard risk can be reducing through at least one, and likely more consequence reduction options, which is not always the case with likelihood reduction. For most technological hazards, consequence reduction revolves around the development of primary and redundant safety and containment. This strategy employs a bit of risk acceptance with a bit of risk avoidance, or an average of both. An example would be a company accepting a bit of delay in the project, by having a buffer time.

Another method to reduce the consequence is to be proactive. Unwanted event or high field failure rates will occur. Therefore, you need to:

1)Think how you will detect the onset of the event, and
2) how to respond.

Maybe you need to stop construction when a part of the plan has a major consequence. Therefore: have plan in place. By acting quick and appropriate you may reduce the exposure to more failures/consequences.

Tip: This can be done by gathering the team around a RoC Drill when you need to reschedule the project process!

Source:

Coppola, D. (2015): “Introduction to international disaster management”

About the Author

Julie Hviid

jh@rocconsult.eu

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