There are all kinds of strategies that businesses need to implement to be successful, existing across numerous different business functions. A key strategy that companies commonly overlook is a mitigation strategy.
Risk mitigation is the process of developing actionable insights that reduce threats to the overall well-being of an organization. Threats come in all shapes and sizes, from natural disasters to cyberattacks. These threats can cause millions of dollars in damages, both physical and virtual. Thus, creating a mitigation plan will help to save your money, as well as improve your business continuity strategy.
How do you create a risk mitigation strategy? Continue reading to find out.
Types of Mitigation Strategies
Every risk is different, requiring a bit of critical thinking in order to tailor your strategy. When determining which strategy to use, it's important to analyze which will work best for the threats you face.
Risk Acceptance (Low cost, Low return)
This strategy is used when there is a low possibility of risk. If the risk you are targeting has a low likelihood of occurring, or the disruption level is low, then you will acknowledge the existence, and decide if further action needs to be taken. If you decide that a specific risk is not severe enough to warrant increased funding, then you file that away into your risk acceptance folder.
It's important to reiterate that "low risk" is not the same as "no risk".
Risk Avoidance (High cost, High return)
Avoiding a certain risk will help you constrain or even eliminate that risk in its entirety. In this strategy you are making a deliberate decision to avoid a risk. This is specifically for the high chance of occurrence/high impact risk items. Completing this will ultimately be a more expensive alternative, but will also give you the results you are looking for.
Risk Control (Medium cost, High return)
This risk mitigation strategy is the most common approach used by businesses. Essentially it is taking the Risk Acceptance strategy and the Risk Avoidance strategy and combining them. This lowers the potential exposure of your business to risk by taking some action, but not going to the extreme extent of avoidance. An example of this risk limitation is if a company accepted that a disk drive may fail, but implemented backups to avoid a long period of failure.
Risk Transference (Medium cost, High return)
Risk transference involves transferring over the risk to a third party. This usually will include offsite data storage, or disaster recovery. Outsourcing helps lower staffing costs, while increasing your efficiency in risk management. Essentially risk transference will help your company focus less on the impacts of any, and all risks, while helping you stay focused on your company’s core competencies.
Each of your risks that you identified in your business impact analysis should be reviewed using at least one of these strategies. This Risk Assessment Template will help you obtain you Overall Hazard Rating of each potential impact.
Once you have analyzed all of your potential risks, your mitigation plan will be complete. Now you know what threats need the most work and can prioritize for improvement.
Implementing a Mitigation Plan
Once your plan is fine-tuned, your next step is to implement it. You will want to review your plan, and provide training to those who are responsible for its execution. This will include management and any individual contributors. It is easy to write reports or make lists of actionable items, but the key here is to take action. Not taking preventative action could potentially end a business, thus, when you find a point of weakness it is essential to mitigate it.
After a successful implementation, it is important to continue to proactively monitor your strategy to ensure everything is working the way it should be. Monitoring requires both observation and frequent tests of your plan to ensure everything is functioning correctly. It is also important to review and update your plan in light of new developments and to keep your plan from becoming outdated or dysfunctional.
The importance of risk mitigation strategies for businesses has never been greater.Without properly planning and preparing for a disaster, you cannot properly understand where and how breaches could impact your business. If you are looking for a partner to safeguard your business' digital assets, contact us today.