Extend Risk Management to Also Include the Opportunities

In this podcast Ricardo presents the concept of opportunities management as part of the risk management process. He also talks about the most important strategies to respond to the "positive" risks in a project environment.

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Episode transcript

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Speaker 1 (4s): Hello everybody welcome to the five minutes

Speaker 0 (6s): Podcast today. I'd like to discuss with you the risk response for Opportunities. It's a usual that we always look for traits when we are analyzing Risk it's very common to see, Oh, I need to do risk management. And then everybody started to think we charred the threats, probability of losses, of delays, of cost, overrun of not dealing with the right people. Risk with procurement, the lace.

Now I'd like to offer a different perspective. I like to talk about Opportunities Management and its really like the same as what we do with traps Opportunities they have the same probability and impact. And when you multiply the probability times, impact in the trap will have the exposition in the opportunity. We have the leverage, So the impact here, its something positive, something good to the project.

So at I like to understand are what I can do and what can happen in my project to avoid one problem that I'm expecting to have a better product, to have a better quality, to finish early, to spend less money. So to change something in this scope, that would be very beneficial for me as a project manager and now also for the clients. So this was the opportunity to Management and when we think about response plan, I like to make an analogy between the response that we give to trap and the response that we give to Opportunities when we think is a trap, we have classical responses, acceptance to accept mints, to do nothing or mitigate mince or reduce art, the probability or the impact in order to reduce the exposition.

So how I can change from a 20% probability to 10% probability in order to reduce my exposition. And the third one it's avoidance is the act of a void. It's the most radical Risk response for prats. So means, Oh, I'm really afraid of someone a steal my car. Then I do not buy a car. If you do that, it will be the most radical response.

You will reduce the probability zero because you will not have the car anymore. But in most of the times, this is very, very hard to do because to do and to avoid some risk in this level, you will need to change dramatically, the project scope. And maybe you say, Oh, know about the project is to buy a car. And if I decide not to buy a car because of this Risk then I will kill my project. Now let's think on the Opportunities size, if we think about except as a gnat of doing nothing, when we faced to threats, when do we translate this to opportunity?

We have ignore what do I mean by ignore, ignore and an opportunity to minister. I will do nothing will do nothing to improve hard to make it happen. Zero. So if the Tappan good, if it not happen okay, bad. So this is the idea of this ignore. It's pretty like that to accept for the Opportunities second, we have the mitigate for Trax. And when do we think, and the opportunity we have in proof, what do I mean by improved improvements, increase probability or is it crease impact or increase both to leverage the results?

So when I think increase probability means, Oh, I have an opportunity to win and the lottery and, but I have only one card, one bath here, Oh, then I will go and buy more to increase the probability. And sometimes improve means spend more money is spent more money to increase this probability cause of that, that we need to have a very good risk management plan because sometimes to improve you say no, it's pointless for me to invest $10 million to increase the chance of winning the lottery, where the award will be $1 million it's bitless.

So I will not do that. And the third one we have for the tracts, the concept of avoidance and the opportunity to have a pursuit is to pursuit. One opportunity means I will transform this into reality. I will increase the probability two, one. So a lot like in the avoidance for threats, sometimes I cannot make this happen because this will kill my project and the pursuit it's pre like the same.

Sometimes it's impossible to increase up to one. I can improve, but not one, not to make that happen, but in some kind of Opportunities is I just put this on my scope and I tell the project, this will happen. I will create all the environment to make this happen. So to summarize what I said to you and this five minutes PM podcast, we have our risks and the opportunity to size. It's not only trapped.

If we look at an optimist way, we have a lot of opportunities to do our, and the base three responses, four Opportunities it's ignore means do nothing or improve and pursue this three will given the answer to all the opportunity lists that I have, and this will balance with the threats. So I have a lot of threats and I have a lot of opportunities and this will help me to make my risk management decision.

I hope you enjoy this podcast and see you next week with another five minute PM. Podcast with a lot of opportunities for everybody to pursue. See you.

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Extend Risk Management to Also Include the Opportunities

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