by Cheryl Wilson PMP, PMI-RMP, CCEP
What exactly is an “Opportunity Risk?” and can you fit the managing of opportunities in your risk framework? The definition of an “opportunity risk” varies across the board and is actually very confusing. This confusion is based on the fact that opportunities are not really risks at all, but positive potential events on our project or in our organizations. So, I propose if you are going to track opportunities, just call them opportunities!
We know risk is an uncertain future event. As Project managers or Risk Managers, we are managing the probability or impact of these uncertain future events. Our goal is to reduce the probability or impact by strong mitigation strategies, and to avoid the risk from triggering into an issue. CPJ Stoneman has said often, “It is better to mitigate a risk than to attempt to survive an issue.”
So what do we do with these opportunities and how do we track them in our Risk Framework? I have often been asked this question. Opportunities as they present themselves could still be uncertain future events but should not be tracked under the same parameters as risks. Also note that some opportunities can actually increase our risks if we pursue them.
If a project team is going to track opportunities, the assessment will be to monitor the Probability and Gain (instead of impact) and manage not mitigate by:
Capture: Align the opportunity to the project objectives, assign to appropriate stakeholder(s) to track the probability and gain. (Internal opportunities)
Transfer: Transfer the possible opportunity to senior management or business development team to make the decision to pursue. (External opportunities)
Ignore: Pass on the opportunity
Share: Finding a partner either internally or externally to assist us in exploiting the opportunity.
As opportunities can take the project off track of the original deliverables, a clear risk and opportunity management process should be communicated to the project team. Opportunity Management is an approach to business development and should be aligned with the organization’s strategic goals. So the caution is to understand project management as the planning and managing of a unique time based set of activities, while opportunity management is more in alignment with the organizations business needs outside of a specific unique time frame.