If you apply risk management completely, identifying opportunities as well as risks, you can better define the outcomes and benefits of your project.
Risk management is how we deal with uncertainty on a project. Things that can go wrong are the risks we typically look for:
- Rising or underestimated costs
- Client dissatisfaction
- Employee turnover
- Delayed or incorrect material delivery
- Technology disappointments, etc.
After all, we consider a risk to be something bad. It’s the way we use the word “risk.”
But, uncertainty also applies to things that can go right – opportunities for more positive outcomes. Any time we find a negative risk, a useful exercise is to flip the way we look at it. Sometimes we can find opportunities. Let’s look at the earlier list and flip the risks to express them as opportunities:
- Rising or underestimated costs – flip – lower or fixed certain costs.
- Client dissatisfaction – flip – increased client satisfaction and usage.
- Employee turnover – flip – increased employee motivation and loyalty.
- Delayed or incorrect material delivery – flip – reliable supportive suppliers.
- Technology disappointments – flip – dependable productive technology.
I shared a list like this as part of a presentation. One of the comments was: ‘Well, yeah. You just said the opposite, right?’ Well, I sort of did. But, it seems important to me because often when we find a typical risk we come up with a typical risk mitigation. Here’s the list of risks with typical mitigations:
- Rising or underestimated costs – mitigate – include contingency.
- Client dissatisfaction – mitigate – get buy-in.
- Employee turnover – mitigate – communication and compensation.
- Delayed or incorrect material delivery – mitigate – order early, contract penalties for mistakes.
- Technology disappointments – mitigate – hire expensive expertise.
I think when we express a risk and we look at a mitigation we may come up with narrower options than when we flip the risk into an opportunity and look for ways to build opportunities into our projects.
Looking at opportunities in the first list, they look a lot like outcomes and benefits. For example, the opportunities expressed as outcomes and benefits as a result of the project could look like this:
- We are able to produce software at a lower cost so that future projects cost 10% less to deliver function points.
- We increase our clients’ satisfaction with the software so that we increase the number of users, number of transactions, and have more complete capture of sales information.
- We increase employee motivation and loyalty so that turnover is reduced by 10% turnover and scores on the annual employee survey go up by 10%.
- We increase supplier reliability by finding mutually beneficial processes so that quality and on-time delivery increase by 10%.
- We improve technology outcomes by increasing training and building learning time into projects so that defects due to technical error are reduced by 10%.
If each of these statements goes from becoming a risk to becoming an opportunity, and then becomes an outcome of the project with measurable benefits, how much more likely are we to mitigate the risk? How much more likely are we to include actions and deliverables in the scope of the project that directly address the uncertainty we are concerned about? More likely, I think.
Realistically, every risk on your project won’t turn into an opportunity. Some risks just need to be mitigated. But, a way to find opportunities is to start with your risks and flip them. Sometimes you will see that your project needs to do more than just mitigate a nagging risk, it needs to turn it into an opportunity to grow your organization and its people during the project. Do it well and you can reduce your risk and better realize the benefits you want from your project; and often that’s what you want from good management of the organization.
Thanks for reading.
Copyright 2013 Glenn Briskin and “The Other Side of Risk”
The Other Side of Risk 
Thank you for sharing Glenn!
It’s great how you explore this nuance, Glenn. Good job.
Thanks, Nia
Glenn, I completely agree that a risk is there for a taking, however approaching the risk in its primary stance is the most important stage if you want to create an opportunity out of it. I like to manage risk in a certain way where I reflect on an opportunity cost which could a measurable outcome. Although, in this day in age, regulation and compliance minimise risk managing efforts through technological advances!