Risk management is meant to be dry and boring. Mostly it is. But I was fortunate enough a few years ago to attend an advanced risk management course and the key lesson I took from the course was that Siemens, when they undertake risk management, look for the opportunities as well as the risks. This key lesson changed the way I manage and view risks now.
Good project management is about understanding what you are to do and avoiding unwanted variations. So first understand your scope: simple stuff but absolutely fundamental, in fact PM 101.
The second premise though is a little more challenging. What are these variations and what should we do about them? To me, the variations are exceptions that I want to manage—I’m sure you’ve all heard about exception management. I’ve come up with a mnemonic to assist with the potential exceptions: ROIDVA.
- Risks: potential negative (conventional wisdom) impacts on your project.
- Opportunities: potential positive impacts on your project.
- Issues: current negative impacts.
- Dependencies: links between other activities, projects etc. which are outside your direct control
- Variations: I use the term variation rather than project change as we have to many different changes to manage (organisational change, system change and project change). These variations need to be managed well to take your opportunities and minimise the effects of risks and issues.
- Actions: you know, the action register. If these aren’t carried out you have more potential for bad news.
Managing all these exceptions well optimises my chance of successful project delivery. In particular, looking for the opportunities (not just risks) provides a great chance to improve outcomes.
At one stage, I was working for a large consulting company. In the risk assessment there was a question on the number of potential changes the client was expected to request. This, in their assessment tool, was a major negative and significantly increased the risk profile and contingency that had to be applied to the pricing.
In my mind though, this was a great opportunity to manage smaller exceptions and include small problems within changes that they would be requesting. Managed properly (a key component), the large number of expected changes provided me with the ability to ensure my current agreed scope could be met.
I continue to look for the opportunities every time I do a risk assessment and risk management exercise. I actually find it fun and challenging to identify the opportunities. Try it!