When Does a Risk and Its Mitigation Strategy Stop Being a Design Choice?

Introduction

In project management and systems engineering, the intersection of design decisions and risk management often becomes complex, requiring a nuanced understanding of both domains. Design decisions aim to create a system that functions as intended, while risk management focuses on identifying and mitigating uncertainties that could hinder project success or compromise product functionality. Recognising when a design decision transitions into a formalised risk, along with the appropriate mitigation strategy, is crucial for project managers and engineers. This understanding ensures that projects stay on track while maintaining product performance and reliability.

Consider a scenario involving sensors in an engineering project. If the sensors are sensitive to electrical noise, the design team may consider incorporating filter capacitors to stabilise the system and ensure accurate readings. At what point does this design decision evolve into a formalised risk with a defined mitigation plan, such as: “Electrical noise affects sensor accuracy, mitigated by implementing filter capacitors”? Answering this requires a structured risk identification, classification, and management approach.

Categorising Risks: Project vs. Product Risks

Accurately categorising risks is the first step. Risks in engineering projects typically fall into two broad categories:

• Project Risks: These affect the project’s timeline, budget, or scope. Examples include delays in material procurement, unexpected regulatory changes, or resource shortages.
• Product or System Risks: These impact the functionality, performance, or reliability of the deliverable. For instance, in the case of electrical noise affecting sensor accuracy, the risk directly relates to system performance and would be classified as a product risk.  

Understanding this distinction ensures that risks are addressed appropriately. For the sensor example, if electrical noise remains a hypothetical concern, it is documented as a risk under product functionality. However, if the implementation of filter capacitors is completed and validated, the concern transitions from a risk to a design solution.

Risks vs. Issues

Another critical distinction is between risks and resolved issues. Risks involve potential scenarios that could impact the project or product, while issues are problems that have already occurred and been addressed. For example, if electrical noise is anticipated but has not yet caused functional issues, it remains a risk. On the other hand, once filter capacitors are added, tested, and confirmed to resolve the noise issue, the risk is closed, and the solution becomes part of the finalised design.  

Proper documentation is essential during this transition. Risks are typically logged in a risk register or matrix, detailing their likelihood, potential impact, and mitigation strategies. Issues, once resolved, are recorded separately to track lessons learned and prevent recurrence in future projects.

Aligning with Stakeholder Expectations

Stakeholder communication plays a vital role in risk management. Different organisations and projects have varying thresholds for documenting and sharing risks. High-level risks might be summarised to address significant concerns, such as “System does not meet performance requirements.” However, granular tracking is often necessary for subsystem-specific risks, particularly in technically complex projects.

A design choice should be formally documented as a risk if it has potential implications for performance, requires significant resources for mitigation, or could impact cost or schedule. For example, addressing sensor accuracy through filter capacitors might necessitate additional budget allocations, design adjustments, or procurement timelines. Stakeholders must be informed about such risks to make informed decisions and allocate resources effectively.

The Transition from Risk to Design Solution

Transitioning from a risk to a resolved design solution involves several key stages. Risks are first identified and analysed based on their probability and potential impact. Mitigation strategies are then developed and implemented during the design phase. The risk transitions into a design feature once the solution is validated through testing and confirmed to meet performance requirements.  

For instance, in the case of electrical noise, the risk is initially identified as “sensor accuracy may be affected by electrical noise.” The mitigation strategy involves adding filter capacitors, and subsequent testing validates the solution. Once this process is complete, the capacitors become an integral part of the sensor system design and no longer require active monitoring as a risk.

Visualising and Documenting Risks

Proper documentation and visualisation tools, such as risk matrices or Excel tables, are invaluable in tracking the progression of risks. Risks with significant probability and impact are prioritised for immediate action, while lower-priority risks are monitored until they escalate or are resolved. This systematic approach ensures that no risks are overlooked and resources are allocated efficiently.  

For example, a risk matrix might classify electrical noise as a “high likelihood, medium impact” risk. Once the capacitors are implemented and tested, the risk probability and impact scores decrease, eventually removing them from active tracking. This clarity allows both engineers and project managers to align their activities with project goals while maintaining focus on high-priority risks.

The Role of System Engineering

From a system engineering perspective, risks are minimised through robust requirements development, systematic validation, and iterative testing. Requirements for sensor accuracy and reliability are stablished early in the project. Mitigation strategies, such as adding capacitors, are assessed during the design phase. Once these strategies are implemented and validated, the risks transition into resolved issues or finalised design features. This approach ensures a seamless integration of risk management and design activities.

Conclusion

A design choice evolves into a risk and mitigation strategy when it addresses a significant uncertainty with the potential to affect the project or product. By systematically categorising risks, distinguishing them from resolved issues, and meticulously documenting their progression, project managers and engineers can anticipate challenges, implement solutions, and minimise disruptions. This structured process of identifying, mitigating, validating, and resolving risks not only enhances decision-making but also creates a seamless transition from uncertainty to reliable design.