THE WORD “RISKS” carries a negative connotation, which is why project managers tend to believe risks should be mitigated or avoided as much as possible. But that common belief means you may be missing out on opportunities.
A negative risk is a threat, and when it occurs, it becomes an issue. However, a risk can be positive by providing an opportunity for your project and organization.
This is critical to consider when registering your risks.
Let's say your organization is rolling out a new website; an example of a positive risk would be having too many visitors. A large amount of site traffic would be great, but there is a risk the servers won't be able to handle it.
The risk management processes are the same for positive risks as for negative ones: You still need to identify risks, assess their impact on your project and monitor them throughout the project. But instead of mitigating, avoiding or transferring positive risks, you'll want to enhance, exploit or share them.
Enhancing the Risk
Enhancing a risk is planning and acting so that the risk's probability or impact rises. The idea behind enhancing is identifying the source of a risk and planning accordingly.
In the website roll-out project, you could identify that to have many visitors, you need people to share it via social media. Therefore, your planning includes making sure it's easy to share everything on the website (by adding share plug-ins, for example). In addition, you make sure to use calls to action to have people follow you on Facebook, Twitter or other relevant social media platforms.
By doing so, not only do you raise the probability that more people will go on your organization's website, but you also raise the impact by gathering new followers on social channels, which you can leverage in the future.
Exploiting the Risk
Exploiting a risk means going beyond enhancing it. It's taking proper actions to make sure the risk becomes an opportunity.
Normally, you would plan to mitigate a risk by listing concrete actions to prevent it. But when exploiting a positive risk, you'll plan to make it happen.
There is a lot of confusion between enhancing a risk and exploiting one, especially because both strategies do affect the probability of the risk happening. The key difference is that enhancing is raising the probability, while exploiting is making sure it happens.
For example, you could plan a media blast to attract people to the website or prepare a social media campaign to drive more traffic. You could also make sure that the servers can handle the extra traffic by using cloud hosting.
Sharing the Risk
Sharing a risk means to have a third party also benefit from the opportunity. The rationale behind this strategy is that your organization may not be able to benefit fully from the opportunity because it lacks the resources of a third party.
For example, you and a third party might plan a contest where the third party offers to give a quantity of its product for free as the prize, while you take care of hosting the contest on your website on launch day. Here, the third party would benefit through contest participants' awareness of its product, and you would gain followers, subscribers or visits through a great prize.
“Exploiting a risk means going beyond enhancing it. It's taking proper actions to make sure the risk becomes an opportunity.”
Accepting the Risk
Accepting the risk is applicable to both negative and positive risks. Basically, you take no action to prevent or enhance the risk and accept that it may happen. In our example, this could mean that if too many users visit the website at once, they will be redirected to a page asking them to come back later because of heavy traffic.
It may seem strange to accept a positive risk without trying to do more. But remember: Enhancing or exploiting a risk comes with a cost—you have to take action and use resources that your organization might not have or that are needed for another project. In that case, you might decide to accept a certain risk and maybe focus on another risk.
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When identifying risks, do not concentrate only on negative elements; think of all the opportunities that are available and plan to exploit or enhance them. By focusing solely on the negative, you will miss out on many opportunities. PM
Christian Bisson, PMP, is a project manager at Twist Image, Montreal, Canada. He blogs at bissonchristian.com.
