Risks are future events or conditions that have some probability of occurring and some impact to your project. You usually always think of risks as being bad.
However, is it true that all risks are bad? Let’s say your project was going to utilize a new tool or new technology. This introduces some risk since you have not used the tool before.
If it is true that projects are generally more risky when you use new technology, why would you ever undertake a project with new technology? The answer is that you perceive there to be a benefit to your project. In other words, the potential impact to your project is a positive. This still meets the definition of risk.
- There is an impact to your project. Normally risk events have a negative impact on your project. However, with positive risk there is a potential positive impact.
- There is a probability of the event occurring. This is still the case with positive risks. In the prior example, if the benefits of moving to new technology were guaranteed, you could make the decision to move forward with 100% confidence. However, the implementation of the technology could turn out bad, in which case you might be worse off than when you started.
Positive risk is also called “opportunity risk”. In these instances, the project manager or project team may introduce risk to try to gain much more value later.
One of the key aspects of positive risk is that you put yourself in a position to take on the risks. Negative risks are potential events that can happen to you. They are the ones that you want to avoid or eliminate. Positive risks are those that you knowingly take upon yourself. They are not out there ready to get us. They are the risks that you step up to since you perceive there to be advantages to do so.
Generally when you are doing risk management on projects you are talking about potential negative events. However, you can also identify the risk events that lead to positive outcomes. These opportunity risks can be managed the same way as negative risks except that instead of eliminating the risks, your risk plan will include activities designed to give you the best chance that the risk event will come true.
Does your team need additional training and coaching on how to manage risks? Please contact us.