One of the easiest aspects of modern risk management theory to blast to smithereens is their excessively irksome notion that risk management somehow includes opportunity management. (“How easy” you ask? Similar to betting on the Sun rising in the East tomorrow.) The evidence for such an assertion is non-existent. For example, consider the Oxford English Dictionary definition of “risk”:
- noun 1 a situation involving exposure to danger. 2 the possibility that something unpleasant will happen. 3 a person or thing causing a risk or regarded in relation to risk: a fire risk.
- verb 1 expose to danger or loss. 2 act in such a way as to incur the risk of. 3 incur risk by engaging in (an action).
- PHRASES at one’s (own) risk taking responsibility for one’s own safety or possession. Run (or take) a risk (or risks) act in such a way as to expose oneself to danger.
Anybody see anything in there that represents a favorable time or set of circumstances for doing something? Now let’s take a look at the definition of “opportunity”:
- noun (pl. opportunities) 1 a favourable time or set of circumstances for doing something. 2 a career opening: job opportunities.
Anybody see anything here that even remotely implies exposure to danger? Me neither.
In order to further the assertion that risk and opportunity are similar, a premise that is self-evidently false, the argument must morph in to “Are opportunity management analysis techniques similar to risk analysis techniques?” Again, the answer is “no.” While they both have in common an attempt to quantify an unknowable future, they differ is what is unknown about that future. For example, risk responses include:
- mitigation
- deflection
- contingency
And yet no one refers to mitigating opportunity, deflecting opportunity, or preparing a contingency in the event an opportunity presents itself, much less the odds of an opportunity arising. Nominally, opportunity is managed using tools such as the SWOT analysis; yet even here the opposite nature of risk and opportunity is clear. Just as Strengths are assessed as opposites of Weaknesses, so too Opportunities are captured as the opposing piece to Threats, or risks.
What’s actually going on when the risk management aficionados assert an equivalency between such opposite terms is that they need to have an entity other than dictionary publishers push their poorly-developed ideas, since the notion that risk and opportunity management are closely related is self-evidently false. However, since the risk managers consistently claim to be able to, in some capacity, quantify the future, then it simply wouldn’t do to only capture the bad stuff. In order to support such a statement, they have to be able to foresee the good possibilities as well; otherwise their techniques will be even more representative of highly questionable management science hypotheses than they are already.
As I have oft stated in this blog, the future cannot be quantified with any precision, positive nor negative, opportunity nor risk. Doubling down on the very idea that they can do so by attempting to force a re-definition of these common phrases (“opportunity” has been around since the 14th century, and “risk” since around 1661[i] -- and about that: how can opportunity be part of risk if “opportunity” was around for more than 200 years prior to “risk”?) can hardly be called advancing the cause of management science.
In fact, that particular tactic more closely resembles something a person who was trying to deceive, rather than illuminate, would attempt.
[i] Definitions of Risk and Opportunity, Merriam-Webster Online, retrieved from http://www.merriam-webster.com/dictionary/risk on 1 August 2016, at 18:53 MDT.
