positive risk response strategies

In this blog post, I will discuss positive risk response strategies. 

A risk is an unplanned event that can affect your project’s objectives if it occurs. The impact can be positive or negative.

If the risk is negative, you will try to avoid or minimize the impact. If the risk is positive, you will want to realize its benefits. As these are distinct types of risks, the strategies to deal with them are different. 

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.

Positive Risk Response Strategies

This is also known as an opportunity. They have a positive impact on your project, so you want them to happen. The optimum strategy for an opportunity is “exploit,” However, it is not possible to use this strategy all the time.

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

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 for it; 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 a large quantity 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, let’s 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.

You have an opportunity here if you complete your project ahead of time: you will get a chance to bid.

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 cost of the response is high, there is a low chance of it occurring, or the benefit does not outweigh the effort.

For example, suppose you may get skilled workers from another project if you convince them to join you. However, you do not pursue this matter and instead let them decide whether or not they are interested in your project.

You can use this strategy for both types of risks.

Share

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

For example, suppose that because of a lack of technical capabilities, you cannot bid for a project your company wants. 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 go for either 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 on your own, 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.

What is your experience with positive risk response strategies? How do you manage them within your project? Share your experience through the comment section below.

Please note that this topic is vital from a PMP and PMI–RMP exam point of view. You will see many questions about it on your exam. Therefore, make sure you have a thorough understanding of these concepts.