Continuing on the project risk vs. opportunity concept, Tom Kendrick’s presentation dove into the identification and management of opportunities that exist in all projects. Called “Disentangling Project Opportunities and Risks“, opportunity is defined as a “favorable juncture of circumstances” while risk is just “bad”.
Some key points of his talk were:
- Scope Opportunity Management is about merging a deep understanding of the user needs with available technical capabilities to create the best deliverable – not necessarily with one first envisioned
- Involve Project / Program management during the objectives and project selection phases; Planning is a fertile source for risks as well as opportunities
- (Opportunities) This is about choice, not uncertainty.
When dealing with uncertain project opportunities “Luck is what happens when preparation meets opportunity.” This has happened in my product development experience when my team had suggested an opportunity to reduce the material cost. We created small experiments and evaluated the results to our criteria and demonstrated that we could lower the product cost without affecting the performance. Win-win for everyone!
Once the opportunities are identified the management is similar to those of risks, but with a different attitude (more positive rather than negative):
- Assessment is in terms of Likelihood and Gain (instead of Loss)
- Tactics now become Exploit / Enhance / Share (instead of Avoid / Mitigate / Transfer)
- Opportunities can increase or decrease risk. There may be uncertain probabilities, uncertain impacts or both and should be assessed and managed.
Are there benefits for you (the PM) if you look for opportunities in your project? Possibly. With uncertain project opportunities, Tom’s observations (for most projects):
- “Success has many fathers, while failure is an orphan.”
- Credit for something that goes well is grabbed by those in power
- Blame for disasters falls on the PM and team.
- “No good deed goes unpunished”
- Delivering miracles may result in unrealistic future expectations.
I’d choose to delight my customer and exceed their expectations. If this is can be accomplished by identifying opportunities as well as the risks, count me in.
Tom, thanks for your insights into the other side of Risk.
Next, The Paradox of Risk Management from Payson Hall…
2 thoughts on “Risk Management – What about the Opportunities?”
This is an excellent post and gave me additional ideas about how to view and identify opportunities. I’m at the PMI North America Congress in the Leadership Meeting here in Orlando. I saw Tom Kendrick across the room this morning. I’ll pass along my compliments to him about this article.
Great post! There’s a book by David Hillson I talk a little about here that also addresses opportunity management.
I would like to clarify point #3 that you made. Opportunities can increase or decrease risk if they are acted on, but we shouldn’t confuse that with actions taken to mitigate or avoid identified risks. Your example of reducing material cost is a great one. Your team didn’t do that to address a previously known risk, they did it to seize an opportunity.