How to Manage Positive Risk on Projects
Risks – they are big, scary things that can disrupt our projects and cause endless headaches. Plus we have to come up with mitigating strategies which means doing work for events that might not happen anyway!
On the other hand, taking a risk is a seen as a bad thing that could lead to a poor outcome. You don’t take risks like going skiing without the right equipment or eating puffer fish that has not been properly prepared. No one wants to end up with a project risk management tool full of too many risks in case it all goes wrong and the project ends up being cancelled or fails to deliver its benefits (which could have a detrimental effect on our careers, not to mention our project). In our personal lives as well as our professional lives, risk taking is something to be carefully considered before we dive in. Just in case.
Unfortunately, we’ve all been conditioned to think of risks as negative. The risk of going skiing without the right kit is that you will fall over and break your leg, ruining your holiday and having to rely on your friends and family to make you cups of tea while they would rather be out on the slopes themselves.
But what if we could turn that around? What if taking that risk meant discovering a whole new way of skiing that started a fabulous new trend and saved people lots of money on their ski holidays?
Risks can have positive outcomes, both in our personal lives and on our projects. At work you will sometimes hear this type of risk called an opportunity.
Types of Positive Risk
Positive risks can take a number of forms but they can be hard to uncover because our brains are so conditioned to think of risks as bad. The easiest way to identify positive risk is to do it the same way as you would the negative risk. Work with your team to come up with a list of opportunities that could impact the project. Brainstorm all the good things that could happen. These could be things like:
- Receiving so many calls about our new product that we make more sales than we anticipated.
- Winning a new deal because of our great project management skills.
- Selling more copies of our software than we thought, meaning the warehouse is swamped with orders.
- Getting 10 times more hits on our website than we planned for, due to great publicity.
Once you have identified all the risks that would have a positive impact on your project, you can think about how you will respond them.
Ways to Respond to Positive Risk
There are 4 ways to respond to positive risk. These are your risk response strategies, and they are a bit different to the types of response you would use to deal with negative risk.
- First up, you could exploit the risk. Exploiting a risk means that you do everything you can to increase the chance of it happening. For example, if you want to get more hits on your new website, spend lots of time drumming up positive publicity by contacting journalists, writing press releases and getting your in-house communications team involved.
- You can also share the risk with someone else, as sometimes you can’t get the full benefit of an opportunity working alone. For example, if you want to make sure that the warehouse is ready to cope with all those orders, work with that team on the order process. You could put in place a just-in-time shipping process so that you don’t have too much stock lying around, but that it is available at short notice when customers need it. Your project benefits by customers being able to get their hands on the product quickly, and the warehouse team benefits from not having to deal with too many orders that are difficult to fulfil at any one time. You can even collaborate with competitors, if that is of benefit to the industry overall.
- The third risk response for positive risks is to enhance the risk. This means trying to establish the root cause. Then you can influence it, again to increase the likelihood that it will happen. For example, if you want to increase the chance of winning that new deal, you will need to make sure that your whole team has excellent project management skills. You can increase the chance of winning the deal by organizing training, getting involved in industry events, raising the profile of your team members in the industry and so on.
- Finally, you can accept the risk and do nothing more. This is always an option for negative risk too. You simply say that you know it is a possibility and that you don’t intend to do anything to bring it about. If it happens, it happens, and you’ll deal with it then.
Managing Positive Risk
Manage positive risk in the same way that you would manage negative risk. You can use your online project management software to record risks and the action plans that go with them. Remember to allocate an owner to the risk, add a date that the risk was first noted (your software may do this for you) and any follow up actions that happen. Build up your risk log with all this information – you don’t need a separate risk log for positive risk. Use the same one as you do for recording your other risks.
Regularly go back through your positive risks and check their status. Are they more likely to happen now? Less likely? How effective have your action plans been? What can you do now to make any improvements? Keep your software risk log up-to-date with the latest status and actions, as this will also be useful when you come to review the success of the project in a post-project review.
Positive risk or opportunities can be great for your project and for you as a project manager. Managing them effectively is a good way of showing how much value you add to the company and why they need you to manage their projects!
ProjectManager.com makes it easy to keep your risk log up-to-date. Let your team enter new risks and see them immediately on your project dashboard. You can assign tasks to team members straight away to increase the chances of your positive risks turning into great opportunities for the project. Take a free trial and see how easy it can be to manage project risks.