Risk Management - Contingency, horizon and action plans

Risk management is part of project management. There are a variety of plans. Amongst others there are Contingency, Horizon and Action plans…

Contingency, horizon and action plans:

Contingency plan

These are plans put into place on the chance that a risk will happen. In practice, a ‘trigger’ will exist to implement the plan when it looks as though the risk is about to occur. The trigger will minimise any time (see also 'The Complete Time management package') delays just waiting for the risk to materialise. This will mean you reserving resource or finance for its implementation. These plans will represent the response to a particular risk threat and a departure from the base plan. They are ‘reactive’ plans.

You will need to consider the implications of ownership for contingency plans. As for the base plans do not add more detail than necessary as this can be added at the trigger stage to generate the action plan.

Horizon plan

Strictly speaking this is not a plan but a method of planning i.e. horizon planning.

If you have a long project over many years it will be very hard to produce a meaningful plan that has reliable detail covering a long period.

No plan ever goes as expected and the longer the time period the more uncertainty exists.

Hence, the project must be split into parts containing key milestones or phases, what ever is appropriate. As one milestone is reached another appears on the ‘horizon’.

In this way, plans for the immediate period of the project can be compiled with more certainty leaving the next ‘horizon’ to later detailed planning.

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As a horizon approaches there will need to be action plans to prepare for this.

Your aim is to try and maintain flexibility while considering future strategies.

Action plans

These are put in place prior to a horizon approaching to begin the detailed planning towards another milestone or end of a phase. This is then the horizon ‘reached’ and a new set of action plans will then need to be put in place working towards the next horizon.

The action plans themselves are well developed and can be implemented straight away. The plans that follow on at the ‘horizon’ may be less so and require review.

By definition the uncertainty beyond a particular time frame will increase making the project more risk heavy. Therefore, when carrying out a risk analysis the effort becomes wasted beyond a certain time period. Thus, immediate action plans will be more detailed than those following later. If risk assessment is not an obvious part of project management (see 'The Complete Project management package') the plans usually have the same level of detail through out.

Detailed plans require skilled resource to generate them. This effort is best placed in risk assessment up front.

In general, the organisational culture says that the more detail you have in the plans the more ‘confidence’ people have.

You know that the plan will go awry somewhere requiring effort to correct it. Thus, it is better to put in effort at a higher level to manage action plans towards horizons and leave their detail till later.

It requires a risk management culture change that recognises the need for base plans (containing proactive actions to mitigate risks) and contingency plans (containing reactive actions to mitigate potential risks should they occur).

Risk: Avoid/transfer/mitigate/accept