Positive Risk Response Strategies in Project Management

Positive risk response strategies are proactive measures to maximize opportunities or positive risks. In project management, these strategies capitalize on favorable risks that can enhance project performance, reduce costs, or improve overall success.

Unlike negative risks, which require mitigation or avoidance, positive risks are embraced and managed through approaches like exploitation, sharing, enhancement, and acceptance. By effectively leveraging positive risks, you can gain competitive advantages and drive project outcomes beyond initial expectations.

According to the PMBOK Guide, you have the following strategies to deal with positive risks:

Escalate
Enhance
Exploit
Accept
Share

I have discussed negative risk response strategies in another blog post. In this post, I will explain the risk response strategies for positive risks.

Positive Risk Response Strategies

Positive risks are also known as opportunities. Because they positively impact your project, you want them to happen. The optimum strategy for an opportunity is “exploit.” However, this strategy is not always possible.

Accept is the least desired strategy; if you take no action and hope the risk is realized on its own.

Now, I will explain each strategy to manage positive risks.

Escalate

You use this strategy when you cannot realize an opportunity because you lack the authority to make it happen.

You approach top management and ask them to manage the risk. Once they review and accept the responsibility, you are no longer accountable; however, you will record it in your risk register for further monitoring.

In the escalate risk response strategy, you entrust top management to handle the risk, and your job is limited to monitoring.

For example, let’s say you see an opportunity to buy a consumable in bulk and get a 20% discount. However, buying consumables in large quantities will not benefit you as most of it will be wasted.

So, you ask your PMO to consult with other project managers to see if anyone requires the same consumable. If yes, you can combine the requirements and place the bulk order to realize the opportunity.

The escalate risk response strategy was introduced in the 6th edition of the PMBOK Guide.

It can be used with positive and negative risks.

Enhance

In the enhance risk response strategy, you try to increase the chance of a risk happening so you can realize it. In this case, you try to seize the opportunity. The enhance risk response is the opposite of the mitigate strategy.

For example, let’s say you will complete your project in three months, and the government is about to float a similar project in two months. You can bid for a new project if you complete your current one.

This is an opportunity for you.

Therefore, you try to compress your schedule with fast-tracking.

Here, you are using the enhance risk response strategy because you are trying to realize the opportunity.

This is a purely positive risk response strategy.

Exploit

In the exploit risk response strategy, you ensure that the opportunity is realized. You do not try; you make certain to seize it.

For example, consider that your project will be completed in three months. You learn that the government is about to float a similar one in two months, and you can bid for it if you can complete your work before.

If you complete your project ahead of time, you will have an opportunity to bid for another project.

Now, you have to ensure that you realize this opportunity. You take every possible measure to finish ahead of time so you can bid for the new project. You bring in new resources, compress the schedule, allow overtime, etc.

Exploit is the opposite of the avoid risk response strategy.

This is a purely positive risk response strategy.

Accept

In the accept risk response strategy, you take no action to realize the opportunity. You leave it as is, and if it happens, you will benefit from it.

You use this strategy when the response cost is high; there is a low chance of it occurring, or the benefit does not outweigh the effort.

For example, suppose you can attract skilled workers from another project by convincing them to join you. However, you should not pursue this matter; instead, you should let them decide whether or not they are interested in your project.

You can use this strategy for both types of risks.

You use the share risk response strategy when you cannot realize the opportunity alone. So, you team up with another company and work together.

For example, suppose that you cannot bid for a project your company wants because of a lack of technical capabilities. Therefore, you team up with another company capable of doing this task and jointly bid for the project.

A teaming agreement is an example of the share risk response strategy.

Let’s revisit the key points:

You will use the escalate strategy so top management can handle it if you cannot realize the opportunity.
If the opportunity is unimportant or uninteresting, you will use the “enhance” or “accept” strategy.
You will choose the exploit risk response strategy if the opportunity is too important to miss.
If you want to realize the opportunity and cannot do it alone, you will try the share risk response strategy.

This is a purely positive risk response strategy.

Summary

Managing risks is important for your project’s success. You must identify all risks and develop a proper response plan. Many project managers ignore opportunities and focus on negative risks. Positive risks are essential because they can help you save money or time; do not ignore them.

Further Readings:

This topic is vital from a PMP and PMI–RMP exam point of view.

Positive Risk Response Strategies in Project Management