Risk Management and the hidden opportunities

We implement risk management to secure our project from possible issues right?  Wrong!

It’s true that risk management and control are major defensive activities to secure our projects.  But while we are busy avoiding the lost ground, we often miss out on important opportunities to gain ground. At the end of the day, losing opportunities is nothing more than losing chances to maximize your project success scope, and or losing market share and accordingly losing business continuity.

Risk Management & Human Nature.

Humans are programmed by society to associate risk with bad things, and the word risk is used in casual conversation as it invariably has a negative connotation and should be avoided whenever possible.  

Project managers,  as humans may receive training and read the information on risk management, but most still ignore the possibility that something good might happen as a result of a risk event. However, to be a successful project manager, you need to deal with all project risks including threats and opportunities.

Lost Opportunities:

How many times have you heard about “lost opportunities”? Most project managers develop plans to deal with threats and very few plans for opportunities. Dealing with threats obviously needs to be done on projects, but don't forget to consider and take advantage of opportunities. Project managers should plan to take advantage of these opportunities as the very essence of business is survival and growth. So, how to implement a Proper risk management process to avoid losing opportunities?

The risk management process and common opportunities

Project management risk can be defined as an uncertain event or condition that, if it occurs, has a positive or negative effect on a project’s objective. Unfortunately, many people using risk management do not fully understand basic risk concepts and therefore utilize incorrect techniques in risk management. Let’s go deeper in discovering the Risk Management Process by highlighting some of the hidden opportunities and how to respond to them.

The common opportunities:

Apart from the successful delivery of the project, there are hidden opportunities that every manager & project team can take advantage of.  Below is a list of common opportunities for most of the projects:

• Learning and training opportunities for the manager and the project team.
• Maintaining and ensuring good relationships with the client and other stakeholders which may provide future opportunities.
• Delivering quality projects safely and on time which again will increase opportunities for further work and would also add to the company’s reputation.
• Lessons learned for better ways of doing things in a smarter, economical and more innovative manner.
• And more ...

How to respond to an opportunity?

Identifying risk is the very essence of risk management Process, and the goal of risk management is to maximize the effects of potential opportunities and minimize or eliminate the threats to the project objectives by implementing the right Risk Response Strategy.

The PMBOK® Guide 6th edition  lists five risk response strategies for opportunities as follows:

• Escalate.
• Exploit.
• Share.
• Enhance.
• Accept.

I will not go deep in describing those strategies as they are out of the scope of this article and there are many techniques, processes, and standards used by other professional association to respond to a risk opportunity. However, it is very important to understand the variety of strategies when dealing with risks. Your selection will define the impact of a risk event and your chance to win the opportunity.

Offense Strategy VS. Defense Strategy.

Maybe you heard in a soccer game, where some coaches use a strategy that the best way to defend (Defense) is to attack (offense). Same in project management, if you want to secure your projects you have to take advantage of all opportunities that support the project objectives and the business behind it.  

Practically speaking, by looking for opportunities that maximize team efficiency or minimize the project timeline will give you the advantage to deal with project issues, and secure your project accordingly.

Conclusion

I would like to conclude the following, many people have a difficult time thinking of project opportunities due to the pessimistic nature of the teams, and this can not be resolved without building a proper project management culture at the organization & the team level.

Although Project Managers identify risks based on their former experience, lessons learned or just a gut feeling, the risks are rarely properly managed or monitored; and this can not be resolved without a deep understanding of the project management process and the impacts of a risk event.