Both the PMBOK Guide (Fourth Edition) and PMI’s Practice Standard for Project Risk Management highlight the need to consider positive events (opportunities) as well as negative events (threats) when performing project risk management activities.
In practice, the majority of the organizations I’ve worked with have demonstrated inconsistency when applying risk management practices. So why should we concern ourselves with opportunity management when threat management should be of greater importance, and yet, does not appear to be succeeding?
Here are a few reasons why a balanced approach to risk management that incorporates opportunities is advisable.
- To paraphrase Carlo Muzzarelli, who provided a great response to a question about this topic in the LinkedIn Project Management Questions section, without considering opportunities when planning and executing a project, at best, you are likely to meet your schedule, cost & other baselines. More likely than not, due to the impact of realized threats, you will end up violating one of these constraints. By managing opportunities, you’ll increase the likelihood of shifting the variance bell curve in the right direction.
- Risk identification workshops provide both a good team building opportunity as well as a cathartic medium for team members to vent or share the angst that they might be feeling about a project. However, certain participants such as project sponsors or other senior stakeholders might not be impressed by a purely negative focus in these workshops. Identifying and exploring opportunities is one way for the team to gain some credibility “brownie points” with these senior stakeholders.
- By including opportunities in qualitative risk analysis workshops, a project manager can get a more balanced idea of individual biases than if the discussions focus on threats alone.
- It can be challenging to secure commitment from risk response owners (especially stakeholders that are only peripherally involved with the project) to execute risk response plans and this is especially true if they are being asked to do this to respond to threats. You might find that this reluctance to participate in the risk response process dissipates if the same stakeholder is responsible for a few opportunities as well.
It can be challenging for a Project Manager or team member to identify and analyze threats and opportunities in an unbiased, balanced fashion – it’s common to dwell on what can go wrong instead of thinking about what could go better than expected. This bias could provide rationale for leveraging the services of an Opportunity Analyst.
While some might be context sensitive, most common risk management tools (E.g. Delphi method, Decision tree analysis, Ishikawa diagrams) are as applicable to opportunities as they are to threats.
For those that have struggled with selling the value of project risk management, opportunity management is a good way to show that the cup is half-full and not always half-empty!
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