Do You Take Risks? Then You Understand Positive Risk.
Risks are future events or conditions that have a probability of occurring and an impact to your project. You usually always think of risks as being bad. That is classic risk management. 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”.
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 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. In all the projects I have managed or coached, I have never seen a project manager account for positive risk. However, you can identify and manage 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.
If you look at both types of risks, you can compare the negative risks with the positive risks to understand the overall risk level of the project.
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