How to Identify Upside Risks
Most project professionals see risk management in terms of mitigating adverse outcomes, but this perspective is limiting. A risk is an uncertain event that, if it occurs, will impact a project's objectives. While the impact is often negative, it's also possible for a risk to have a positive effect on the project. We usually call these upside risks "opportunities." Mature project managers are concerned with opportunities as much as threats.
Identifying opportunities ahead of time ensures your company can exploit them fully when they occur. However, such discovery can be challenging. Our instincts sometimes seem more tuned to what can go wrong than what can go right. This article outlines four steps that will enable you to uncover and capitalize on positive risks.
Harness Absent Threats
When anticipated adverse events do not happen, it can create opportunities for positive outcomes. For example, you learn that the launch of a competing product has been delayed or even canceled. You use this opportunity to contact existing customers with a generous promotion in order to protect your market share.
Leverage Secondary Risks
Mitigating a risk can often create new risks, which are called secondary risks. While secondary risks are usually harmful, some may have positive impacts. For example, in response to cybersecurity threats, your firm might strengthen its IT infrastructure. You find that this not only secures your data but also improves system efficiency and increases customer trust.
Invert Quantifiable Threats
Some threats exist on a quantifiable scale. It's possible for things to go very wrong, but it's also possible they will go right. In these cases, examining the inverse of the threat can uncover hidden opportunities. For example, your project may have allowed 10 weeks for a notoriously slow government department to grant regulatory approval. If the approval comes through in 4 weeks, you can bring the product launch forward.
Seize Pure Opportunities
Sometimes, a positive event can emerge by pure serendipity. It is difficult to predict such events ahead of time, but a project manager with a mindset geared toward positive risk can identify and exploit them quickly. For example, a change in the regulatory environment creates sudden demand for your product in a new country. Localizing for this market brings rich rewards.
Risk Register by ProjectBalm is a cost-effective tool that helps you record and manage your risks.