Risks represent potential future events or circumstances that could have an impact on your project. Generally we think of risk having a negative impact. However, what if the impact on your project was positive? In that case you would have an opportunity risk.
You have heard the saying that you should “push the envelop”, “be a risk-taker”, or at least that you should take “intelligent risks”. These statements get to a difference between how risk is typically identified from a project management perspective. Positive risk refers to risk that we initiate ourselves because we see a potential opportunity.
For example, let’s say that you have a project that is scheduled to take 12 month to complete. Your sponsor would like the project completed earlier. One of your team members has an idea. If you utilize a new software tool, it is possible that you can deliver the project in nine months. If this were a guaranteed solution, you would jump on it. However, there is risk since it is the first time you have used the tool. There is a lack of expertise and a start-up learning curve. It is possible that if the tool does not work out, the project could end up taking 15 months to deliver. What would you do?
This example illustrates the concept of opportunity risk. If you decide to use the tool, it is a risk you are introducing yourself, based on an evaluation of the chances of success, and the impact of success, versus the chances of failure and the impact of that failure. When we say we are intelligent risk-takers, it is these types of decisions that are being evaluated.
There are a number of ways to respond to positive risk.
Accept. Do nothing and hope that the benefit of the positive risk occurs.
Exploit. Remove the uncertainty of the risk and try to make certain that the event will occur.
Share. Share the risk with another party that is better able to capture the benefit associated with the risk.
Enhance. Look for ways to increase the probability that the risk occurs, or increase the size of the benefit if the risk event occurs.
Even though you may commonly think of project risks as having a negative connotation, you can also use risk management to identify and quantify potential positive risks as well.