Project Management

3 Ways to Think About Risk

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Date


Categories: Risk Management


Dave Wakeman

October 2023

Andy Jordan wrote an interesting article recently on rebranding risk. That got me thinking about people’s relationship to risk, especially since any decision we make has a certain amount of risk involved.

Here I share a few ways that I suggest you think about risk….

1. Know that every decision carries risk.

There is no such thing as a risk-free decision.

Acting on something carries risk.

Not acting on something carries risk.

Recognizing that any action requires a certain comfort with the unknown allows you to move to a more productive posture. One focused on the opportunity at hand.

Instead of thinking you’ll eliminate risk, this type of thinking can enable you to focus on risk management.

  • What are the possible outcomes and risks if we take action?
  • What is the possibility if we do nothing?
  • Are there things we can do to limit or eliminate potential downsides?
  • What about the upsides to inaction?
  • The upsides to action?

It is unlikely that you’ll find a risk-free solution, but you can probably find a course of action where the potential reward is greater than the perceived danger in taking action.

2. Understand that if risk wasn’t involved, there would be no change.

The twin to the first point is that risk comes with change. Every action carries a certain amount of risk, certainly. There is also no guarantee that your risk will succeed.

At the same time, there is often risk because you need to create change in a project or an organization. Understanding the necessity of risk to change helps people take action.

As Tottenham Hotspur manager Ange Postecoglou observed, “If you want change, you have to do something differently.”

That’s at the heart of risk management: You can’t expect things to be different if you don’t do things differently.

Risk is a prerequisite of change.

3. Move your focus to the opportunities at hand.

It could be that the opportunity in front of you will improve your processes in a way that will enable you to save time, money and other resources in a project with a tight budget.

The opportunity could be in building out a new product or service that opens your business up to new chances.

The opportunity could come in the form of learning and development of your team members or yourself.

Opportunity is all over. But it often comes because of the change that new solutions or new processes create.

Learning a new skill/process or creating a new product is all risky stuff, but risk is the partner of opportunity. Again, without change, nothing new happens—and that requires risk.

I appreciate Andy thinking about risk in a new way. For me, I always look at the opportunity first. Then, think about risk later. That is sometimes risky as well—because there have been occasions where I could have used a bit more patience before action.

Of course, some of these risky actions paid off incredibly. And that’s the point: Risk and reward go hand in hand. Nothing changes without change, and that is risky.

How do you think about risk in your own projects…and life?

Posted by David Wakeman on: October 05, 2023 03:27 PM | Permalink

Comments (4)

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Luis Branco CEO| Business Insight, Consultores de Gestão, Ldª Carcavelos, Lisboa, Portugal
Dear David
The topic you brought to our reflection and debate is very interesting.

Thank you for sharing and your opinions

Many years ago I heard(read) "Insanity Is Doing the Same Thing Over and Over Again and Expecting Different Results"

I understand, however, that there are people who are more risk averse than others

What would become of people who make a living from "change management"?

avatar
Abolfazl Yousefi Darestani Manager, Quality and Continuous Improvement| Hörmann-TNR Industrial Doors Newmarket, Ontario, Canada
Thank you for sharing!

avatar
Kwiyuh Michael Wepngong Senior Accountant| Africa Eye Foundation; Magrabi ICO Cameroon Eye Institute Yaounde, Centre, Cameroon
Thanks, Dave... So powerful when you said "There is no such thing as a risk-free decision"

avatar
Weihua Ma Program Manager| HENGFENG BANK Co.Ltd China, Mainland
Thank you for sharing!

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