Uncertain Upsides

Known globally as The Risk Doctor, David has been working in risk management for about 30 years. He has worked in 48 countries on every continent except the Antarctic (too cold!), with clients in most industries.

  Risk Management   ProjectsAtWork  

Risk management isn’t always about identifying the downside, though many project managers seem to focus exclusively on this side of the risk coin. The fact is, we can assess and prioritize opportunities using the same techniques that work for threats, including brainstorming, root-cause analysis and probability-impact matrices.

Risk is a double-sided concept. It includes the possibility of both upside and downside risks, with either positive or negative effects on the achievement of objectives. We use the word “opportunity” to describe an upside risk with positive impacts, and “threat” is used for downside risks with negative consequences.

Although the theory is clear, in practice many organizations, project managers and team members have problems with including opportunities in the risk process. We’re not sure how to identify a genuine opportunity, how to assess or prioritize it, what response options exist, or how it should be managed. But we don’t seem to have the same difficulty with threats. If we believe that risk management could and should address both opportunities and threats, how can we bring our practice into line with theory?

The secret to effective opportunity management is to recognise that an opportunity is the same as a threat, apart from the sign of the impact. Once we see this similarity, the way to address …

Please log in or sign up below to read the rest of the article.