Mitigation or Capitalization
Once risk potentials have been identified, analyzed and evaluated, action can be planned and taken to mitigate threats that constitute unreasonable risks as well as to capitalize on the opportunities that warrant action.
Approaches to Mitigate Threats
- Risk Elimination: Prevent the potential of risk.
- Risk Reduction: Minimize the impact or lower the likelihood of risk.
- Risk Avoidance: Stop or curtail the planned activity to avoid risk.
- Risk Assignment: Share (or transfer) the risk by outsourcing or insuring the activity.
- Risk Acceptance: Don’t mitigate the risk, accept it.
(While we list five options, only Elimination and Reduction can be considered true mitigation options. While avoidance may seem like a “safe” option, ending the related activity is often not a viable option. And assignment or acceptance options impart a false sense of risk mitigation unless the potential risks are low. This course focuses on Risk Elimination and Risk Reduction, not the other three options.)
Approaches to Capitalize on Opportunities
Most opportunities will be customer-focused. “Categories” of opportunities include:
- Optimize products/processes: Can the product/process be made more robust?
- Revamp underperforming assets: Have customer needs changed?
- Enter new markets: Is there an opening for existing products/processes in new markets?
- Introduce new products: Is there a market opening for a new product/process or a product line extension?