A few months ago, my wife and I were on a sunrise game drive in South Africa. None of the animals seemed to be awake yet, and all was quiet. I sat on the edge of the vehicle, my camera round my neck and ready, more in hope than expectation. Suddenly and without warning, an adult cheetah emerged from the bush two meters from my elbow, looked straight at me, gave a ferocious snarl and disappeared again. Click! I was so glad to be ready for the unexpected event, and to have a great photo to prove it.
In 1990 I was the risk specialist on a team taking part in a feasibility study, developing a gun fire control system. The British Army had booked the firing range and some tanks for a competitive shoot-off between systems from our company and one other. The trial date was fixed, the timeline was tight, and we had to cut some features in order to meet the deadline. But we maintained a wish-list of the functions we’d omitted, just in case we had the chance to put them in at some point. One week before the trial, the Army announced a two-week delay for operational reasons. We immediately remobilized our team, implemented several of the features at the top of our wish-list, did some additional system integration tests, and submitted an improved solution for the postponed trial. Meanwhile the competitor company had given their team a week off as a reward for working so hard to meet the original date. The trial took place, our system outperformed the other in the shoot-off, and we won the main development contract. Our “just-in-case” plan made all the difference.
What links these two disparate stories is awareness and preparedness. In both cases, we recognized the possibility that something unexpected might happen, and we were geared up for it. We had a nice surprise and we were able to take advantage of our “good luck”. Others in the same situation missed out, either because they hadn’t considered what might happen, or they weren’t ready when it did.
I’ve always been fascinated by the future, and the thought that our actions now can change what might happen later. This naturally led to an interest in risk management, proactively addressing uncertainty in a way that makes it more likely that we’ll be successful. My first few years as a risk specialist were focused on preventing things from going wrong, or at least making them less likely and/or less severe. But I always felt there was something missing. Everything was focused on the negative, and the best outcome from risk management was that nothing bad happened.
Everything changed when I realized that not all uncertainty is bad. The future holds positive possibilities as well as potential problems. And if we can be proactive in addressing downside uncertainty, we can surely do the same for possible upsides. With that realization, my role as a risk specialist took on a completely different complexion. I still had to help people prevent bad things, or make them less likely or less bad. But I could also help people find potential good things and capture them, or at least make them more likely or better. The idea of including opportunities within the scope of risk management, alongside threats, was born.
Since then, I’ve been on a mission to spread this idea as widely as possible! When we understand that there are upside risks as well as downside risks, risk management takes on a different significance. Using the same risk process that we all know and love (?!), we can continue to identify, analyze and respond to threats, avoiding or minimizing negative impacts on our objectives. But we can also find, prioritize and proactively address opportunities, capturing positive savings for our projects and business, and enhancing our chance of success. The risk process delivers twice the result for the same effort: minimize threats and maximize opportunities. This needs a few simple process changes, with specific techniques to find opportunities, and response strategies that target them, but the basic approach is the same. We’re asking the same set of questions through the risk process, but with a positive spin:
- What are we trying to do? (objective-setting)
- What might affect us? (to make things better)
- Which are the most important? (most likely and biggest positive impact)
- What could we do about it? (capture, maximize probability, enhance impact, share)
- When we’ve implemented our response, did it work? (risk review)
- What’s changed? (risk updates)
After over twenty years of following this broader approach, we’ve discovered simple ways to make it work in practice, changing the way we think about risk and providing tools and techniques to find and capture opportunities in projects and business. Many major organizations are reaping the benefits of this inclusive way of managing risk, and professional bodies are adopting it in their standards and guidelines.
The biggest change isn’t process though, it’s mindset. If we’re persuaded that risk is always and only bad, then we won’t go looking for opportunities and we’ll miss most of them. Instead we need to develop awareness and preparedness: good things might happen and we ought to be looking out for them and ready to respond proactively. I captured that amazing cheetah photo because I was aware of the possibility that something might happen and I was prepared for it. Our team won the British Army contract because we were ready to take advantage of any good luck that might come our way.
If we’re determined to do whatever we can to optimize the chances of success for our projects and business, we’ll welcome a structured way of finding opportunities that could help us. A broad and inclusive approach to risk management is the answer. Try it – you’ll be pleasantly surprised!
For more information on how to include opportunities in the risk process, check out David Hillson’s latest book “Capturing Upside Risk: Finding and Managing Opportunities in Projects”, published in June 2019 by Routledge. Full details from http://www.crcpress.com (search for “Hillson risk”). Use the code ADC30 when ordering direct from the publisher for a 30% discount.