Positive in risk management;)
“In the middle of difficulty lies opportunity”
Albert Einstein
The book [1] (the list of sources is indicated below) shows the maturity levels of companies and organizations in terms of risk management. There are 5 levels or stages:
- Problem stage - when risk management is not carried out until they become problems
- Mitigation stage - when people are familiar with the concept of “risk”, but no one knows how to manage risks on a regular basis (the concept of risk management was presented to them, but so far in very limited amounts). Often the only risk management strategy is to reduce the likelihood of its occurrence.
- Prevention stage - when risk management becomes the activity of the team as a whole, not only a management task (project, department, company); more and more interested people are involved in the process, who can identify the risks, however, their quantitative assessment so far causes certain difficulties. This stage is a turning point from reactive to proactive risk management.
- Anticipation stage - this stage is characterized by the collection and analysis of metrics in order to predict future problems and predict certain events associated with the project. The customer (client) is also involved in the risk management process, which makes it possible to more accurately conduct a quantitative risk assessment, as well as correctly prioritize
- Opportunity stage - this stage represents a positive vision of the risk management process when all interested parties are involved in the process (managers, project team, customer representatives). At this stage, each risk is interpreted (can be interpreted) as well as some possibility. Everyone is aware of these opportunities and the risks associated with them and can choose different paths to move on, finding compromises between the level of risk and new opportunities.
It is clear that different companies are at different levels of maturity. In my opinion, my company is now somewhere between Anticipation and Opportunity levels of maturity, but we continue to work;) And at what stage is your company?
Even when I started studying risk management, I was very interested in the highest stage of maturity - the Opportunity stage. Although debates about the exact definition of the concept of “risk” are still ongoing, it is traditionally believed that such risks as uncertainty and loss are associated with risk. Everything is clear with uncertainty, but risks, along with negative consequences, can provide certain opportunities.
What are these opportunities? This may be making more profit from product development, activity with greater added value, minimizing alterations in the finished product, long-term profits or saving from certain solutions (for example, using a particular system or component, one approach or another, etc.).
Specific examples? It’s more difficult with them. Here is what I managed to find in [2]:
- Initially, the project was planned for 90 days. The customer would like to receive the product earlier (he will thus receive more profit), but he agreed with this assessment. Using a new testing tool can deliver a product within 60 days, but no one has worked with a new tool in the company until now (lack of experience, time to train, etc.). If this tool does not work, then the project may take even 110 days instead of 90.
- An assessment was made according to which it takes 6 months to complete a medium-sized project. We can finish the project earlier if we use the Extreme programming methodology. In this case, the first build will be delivered to the customer in 3 months, the rest - every month. However, with this approach, there is a risk that this methodology will not work for this project, or that the project team will resist changes, which will cause delays in the project.
Although the traditional approach to risk management is inclined to consider them only from the point of view of any troubles (losses, time delays, decrease in quality, etc.), I believe that considering them from a positive point of view can provide additional opportunities for profit, guarantees project success, customer satisfaction.
Honestly, I’m not very good at working with “positive” risks - the specifics of work and the space for improving risk management processes in my company are affecting. Have you encountered “positive” risks in your work? Can you give examples of such risks and how to work with them? In what cases did success await you, and in which - complete failure?
List of sources
[1] Hall, EM, “Managing Risk - Methods for Software Systems Development”, Addison Wesley, ISBN 0201255928, 1997
[2] Mochal, T., “Factor Positive Risk Into Project Planning”, Tech Republic, 9 Sept. 2002 - techrepublic.com.com/5100-6330_11-1027709.html