Opportunities are positive risks – the risks we don’t spend much time thinking about because everyone assumes risk is bad!
However, if we use Dr David Hillson’s definition of risk as being uncertainty that matters, then some uncertainty could most definitely lead to a positive outcome for the project. Those are opportunities, and we handle them in the same way that we do the ‘negative’ risk or threats.
There are 5 strategies for responding to opportunity risk and they are:
Let’s look at each of those.
Escalation is also a tactic to use for threat risk and the same approach applies here. When the opportunity is bigger than the project and falls outside of the scope of your work, escalate it up to the programme manager or portfolio manager, or simply pass it on to your boss. There’s nothing you can personally do about it as the opportunity falls outside of your level of authority. Your job is to make sure that the information you have is passed on to someone who can best act on it.
You can continue to support whomever picks up the information but you don’t have to track and manage the risk any longer.
This strategy is where you basically force the risk to happen so you benefit from whatever good things are coming your way. You want to increase the probability of occurrence to 100% because it’s worth it.
That might include spending money or changing the direction of the project to make sure that you get the outcome you want. For example, you could pull resources from other projects on to your project to make the work take less time, you could upgrade some infrastructure to take advantage of technological advances by being able to use new solutions and so on.
I don’t really use this strategy much because I tend to think that if we take steps to make something happen, it’s not a risk any more, but that’s just how I think – I know the literature talks about this as a particular, specific strategy. For me, I wouldn’t ever have it on the risk register, it would be something we discuss as a team and then adapt our plans via a change request to make it happen. What would you do? Let me know in the comments below.
The Enhance strategy is similar to Exploit in that you want to make the opportunity happen, but here all you are doing is influencing the outcome – you aren’t forcing the probability to turn to 100%.
What you try to do is increase the likelihood of it happening or increase the impact it would have if it did happen. You don’t have a guarantee of the outcome but you are influencing and negotiating your way to being able to capitalise on that fab opportunity.
I think this is hard to articulate because your response plan relies so much on what the opportunity is. We identify opportunities throughout the project life cycle and don’t always record them as risks. For example, if something came up in a team meeting where we could potentially complete a task more quickly if we had an extra pair of hands, we would decide there and then to do it and hope for the return, without necessarily formally documenting the risk.
Perhaps that tells you more about my lackadaisical approach to opportunity management than it does about the Enhance strategy!
Sharing is a little bit like transference for threat risk. It’s where you split the benefit with a third party on the proviso that they help you try to get the opportunity. For example, you might share resources for a better outcome, you might set up a joint venture or create a specific team. All of those things might mean sharing the risk and therefore the benefit between several entities or teams, but overall may make the potential benefit larger.
Finally, the classic strategy of do nothing. This is also a valid response and useful when there isn’t much to be had by way of opportunity. You basically sit it out and wait to see if the benefit occurs and you might want to have a contingency approach in place in case it happens and you want to act then.
However, as with accepting threat risk, make sure that you are constantly monitoring the situation and actively discussing these risks with their risk owners and the team. You don’t want to be in a situation where you miss an opportunity because the context or environment changed and your risk response plans weren’t updated as a result.
Which of these have you used? Share your best tips for managing opportunity risk in the comments below.
So far, all we’ve achieved in the risk management process is working out how to respond to risk, but it’s all been about talk and planning. Next time I’ll be looking at how to implement risk responses and make sure the work to deal with risk actually gets done.
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