Positive & Negative Risk
Risk is etymologically defined as run into danger. It could be understandable how Risk Management is vital. Companies cannot possibly define their objectives for the future without defining their Risks. According to PMBOK from PMI for Risk Management knowledge, it is defined as Plan Risk Management, Identify Risk, Perform Qualitative Risk Analysis, Perform Quantitative Risk Analysis, Plan Risk Responses, and Control Risk.
Today I will touch on one of these steps details; planning risk response. At Project Management, when you are dealing with a risk that you are expecting to occur in the near future, there are some methods you should apply your risk response and risk management documents. And there will be two types of risks Positive and Negative Risk.
How do you Plan Risk Respond to Positive & Negative Risks?
There are plan strategies that you could use when you are facing a risk at your project. Let me briefly summarize this topic with examples.
Positive risk is known as an Opportunity. You should plan your responses to your positive risk as;
1- Exploit — You will take advantage of it. It is an opportunity to allocate your resources. Exploit is the opposite of the avoid risk response strategy.
2- Share — Your resource is not enough to respond to these risks, you can share this risk with other firms
3-Enhance — You will increase the likelihood of risk effects. This is the time if you want to hit the bullseye and do not afraid from allocate resource more.
4-Accept — When you can not exploit, share, or enhance the positive risk, you should just accept as it is.
The Negative risk (Threats) could be responded;
1-Avoid — If you can keep away the risk, for instance, postponing your sales date avoid off-season, it will decrease the effect of risks.
2-Mitigate — To decrease the effect of it you could use your resource get possible little damage to your business.
3-Transfer — Basically you will redirect your Risk Arrows. It is a good example to use an insurance firm for it.
4-Accept — As we examine at a positive risk section, sometimes the best option could be seen just accept it. Many firms are facing with Force majeure — Pandemic- and they are just accepting it.
As you see the risk is not Boogeyman for you. You should embrace and assess the type of which side of it. It should be one of the aspects you have to manage in your project and maximize or minimize potential.