Elizabeth HarrinDirector| RebelsGuideToPM.comLondon, England, United Kingdom
Can anyone give me some examples of positive risk on projects please? I have one example that I use all the time: a website that is more popular than expected and gets loads more hits than planned. I'm not even sure that's a great example. What else can I use when I'm talking to stakeholders and my team about positive risk? Thanks! Saving Changes...
Positive risk is essentially defined as 'too much of a good outcome', so I think your website example embodies the idea of positive risk quite well. Another positive risk example is that a tire manufactured to last 50,000 km actually lasts 1 million km (with the risk being that tire sales would plummet, since people wouldn't need to regularly replace their tires).
This actually seems to be a different definition of positive risk from the one used in the other examples here. Do you think their understanding is incorrect or does positive risk encompass both possibilities (too much of a good thing and spinning a risk that could be negative as a positive)?
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1 reply by Stéphane Parent
Sep 28, 2017 4:25 AM
Stéphane Parent
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Even my example, Veronica, can be a negative risk in certain situation. As a contract incumbent, you could be, under certain circumstance, in a less enviable position than competitors. The contract may be ours to lose, rather than ours to win.
Saving Changes...
Stéphane ParentSelf Employed / Semi-retired| Leader MakerPrince Edward Island, Canada
Sep 27, 2017 9:02 PM
Replying to Kiat Soon Chua
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Hi Stephane, in this case, how do we appreciate this asa positiove risk? Care to share more on this? Thanks!
I'm glad you asked, Kiat.
Since you are the current contract incumbent, you have a "risk" (opportunity) of being in an advantageous position for the contract renewal. As the incumbent, you should "enhance" this advantage by leveraging your knowledge of the customer and proposing solutions and services that are highly specific and tailored. You could also "enhance" your offering by finding ways to be more efficient, thus reducing your costs. Saving Changes...
Stéphane ParentSelf Employed / Semi-retired| Leader MakerPrince Edward Island, Canada
Sep 28, 2017 1:38 AM
Replying to Veronica Tremblay
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This actually seems to be a different definition of positive risk from the one used in the other examples here. Do you think their understanding is incorrect or does positive risk encompass both possibilities (too much of a good thing and spinning a risk that could be negative as a positive)?
Even my example, Veronica, can be a negative risk in certain situation. As a contract incumbent, you could be, under certain circumstance, in a less enviable position than competitors. The contract may be ours to lose, rather than ours to win. Saving Changes...
DEBASIS CHAKRABARTIGeneral Manager & Country Operations Head - Burundi Africa| Kalpataru Power Transmission LimitedKolkata, West Bengal, India
As we all know "Risk" is defined as an uncertain event which has the potential to have an impact. In short, Risk = Probability x Impact.
Now, this impact can be negative on you (or your project) or it can be a positive impact. This means impact can be (-) or (+). So, Risk = Probability x (- or +) Impact.
Hence, Risk can be (-) or (+). In case of the former, it is called a negative risk (or simply 'risk' in common parlance). In case of the latter it is called a positive risk (or 'opportunity' in common parlance).
It may or may not rain in a city 1000 miles away. But if it does, you are not likely to get drenched. So in this case the impact is zero for you, and thus risk is also zero. irrespective of the probability.
However for someone living in that city, if it rains, he/she is likely to get drenched and catch a cold. That is a negative risk since the impact is negative. However for an umbrella seller in that city, the outcome of the same rain could be more sales, and thus the impact is positive. Therefore for the seller, it is an opportunity i.e., a positive risk.
Hope this clarifies. Saving Changes...
Ramachandran SwaminathanRegional Delivery Manager| Oracle Consulting IndiaBangalore, Karnataka, India
In a software project - Any CR(Change request) from the client, which reduces the overall complexity and timeline of the project is a positive risk Saving Changes...
Hi Elizabeth-
We were involved in upgrading a compressor wheel and released design for new wheel but using original shaft to bid response for additional power output as energy demand has increased over the years.
The customer had experience vibration issues which this redesign could potentially solve.
I say potential because the customer had no vibration data records or reports and this vibration would occur only on slow startup. This was a risk upon entering the contract. We sent crew to investigate and found that The customer had another compressor and it worked without issues. We didn’t eliminate our design but couldn’t support the statement that the design might solve the issue. Engineering came up with a different solution saving us a lot of money and three weeks off the schedule. We recognized this risk as an opportunity. Saving Changes...
Tim PodestaDirector of PM/PMO| Former BP- now IndependentPenn, Bucks, United Kingdom
I see positive risk as an opportunity where there is the possibility of an outcome that could enhance the value of a project. An good example is where there is a benefit for a project that exceeds the project baseline assumptions such as increased sales or volume; or where there is a cost saving from reduced material or supply costs. Saving Changes...
Hi Elizabeth,
Potential change in law that change requirement, could play positively.
Recent negotiation by Netflix in Canada, the negotiation ended with a positive result for Netflix. The negative part would have been to paid taxes. Result netflix will put money to produce locally. and can earn credit and more money to produce then what taxes could have negatively impact. Saving Changes...
Andrey GrubinPMP, PMI-ACPBrooklyn, Ny, United States
40% chance of receiving more orders for your new product than can be produced.
Creating a better than expected design so there’s a 20% reduction in materials.
50% probability providing training could reduce two critical tasks and save $5,000. Saving Changes...
ok - I'll play devils advocate here - "Positive Risk" is an oxymoron and a poor one at that.
While @Debasis's overly broad arithmetic approach provides an arbitrary justification for a positive spin on the phrase, the fact is the word "risk" refers to the possibility of a negative outcome (loss, peril, hazard, delay, death, etc.).
The examples given above are all positive outcomes on their face. But they can all resolve down to negative outcomes, or risk. Not to pick on @Andrey but getting more orders than you can produce is a plain old vanilla risk - full stop. Saving Changes...
