Contingency Plan: Having a Plan B

Feeling confused with the title? Well, the term looks like jargon, but it isn’t. In action movies, you must have often seen that the hero is ready with a ‘Plan B’ in the first place if things go wrong. This is the contingency plan – an integral factor in the process of crisis management.
Imagine a situation where you have an important presentation to make and your colleague, who worked on the presentation doesn’t turn up for some reason. Your job depends on this situation. The situation is scary and risky. But you can mitigate it if you have an alternate plan. In simpler words, this is your Contingency Plan.

“And even, if circumstances required, a contingency plan for his contingency plan’s contingency plan.” ~ Frank Beddor

A contingency plan is a special plan or strategy that is devised to face a usual or unusual risk that may happen in the course of a project. Here, a plan is all set to cope with a positive or negative incident that may happen in the future.

This can be a possible risk or side effect, or even a positive situation when a big amount of money or a big project comes in hand. Here, the idea is to set up a backup plan and keep it parallel to the executed plan, and then use it when the suspected risk comes.

Now you may ask, how is it different from a crisis management plan? Well, a crisis management plan deals with developing a plan immediately when a crisis occurs. But contingency plans are developed and kept ready right at the start of a project.

“One thing that makes it possible to be an optimist is if you have a contingency plan for when all hell breaks loose.” ~ Randy Pausch

In other words, a contingency plan is a pre-decided crisis management plan. No contingency plan executed in a successful project is a good thing to hear. But always, there must be a well-equipped plan to cope up with the possible risks irrespective of the confidence in the project.

4 Secrets To Creating An Effective Contingency Plan: The Golden Weapon

Since the need for such a plan is clear, let us discuss the four important steps in strategizing and executing a contingency plan.

Risk Identification

The first and foremost task in preparing a contingency plan is identifying all the possible risks of the project. No task comes without a possible risk.

Depending upon the range of the project, the risks may be high in number or intensity. Thus, along with the project plan, possible risks also should be listed while planning an effective strategy.

Every risk is either internal or external. Internal risks are the risks that can be controlled by the project team, and external risks are the ones that are beyond their control. Generally, internal risks are the basic part of the contingency plan.

This is because internal risks are foreseeable right from the start, and external risks usually arise during the auction. Such external risks also tend to shift more towards crisis management, rather than contingency. So, very few external risks that are probable to happen are included in the contingency plan.

Risk Evaluation

Now that the possible risks are listed, the next thing to do is evaluate their possible effect. That is, separating them based on high, medium and low-risk factors. But this separation is done as a result of the combined evaluation of different factors.

Like risk identification, this too must be done with most care as no risk should be skipped beyond this step. Here, the team evaluates every risk for its probability and severity, which proves to be an exhausting process.

This is a two-dimensional approach by which the possible effect of the high risks is arranged from high to low. Any kind of misevaluation may lead to heavy tolls in the future.

Risk Response Development

The next step relies on developing the strategies of response. Risk response development is generally devised through two strategies- mitigation and contingency. Mitigation is the method of attempting to reduce the effect of a risk even before it happens.

When the risk is almost sure to be appearing soon, effective measures are taken right away so that its impact reduces. This is the technique that the most successful coronavirus slayer countries did in the beginning – reduce its impact and then treat it!

The contingency plan is the same as we discussed in the beginning. All the probable risks are analysed and a contingency strategy is set which is activated only when the possible risk happens.

Risk Response Control

Risk response control refers to executing the contingency plans to respond to the risks that appear during the project. Concerning the nature of the risk, an effective or contingency plan that has been prepared is executed.

It is to be noted that either of the two methods has been proven effective for the fast treatment of risks in any project.

Even though all these 4 steps are important in the process, the first two are said to be the crucial ones. This is because the selection and analysis of risks and responses happen here. Even the slightest of mistakes cannot be encouraged in such situations.
Thus contingency planning is a very risky business, which should be carried out only with the help of expert research, group discussions and multi-angle perceptions on a project. Always have a Plan B and even C if required. Even if hell doesn’t break loose, you might need it.