Article:

Rethinking project risk: finding opportunity in the unknown

Written by Prebagaran Jayaraman Monday 26 February 2024

It’s common to think of ‘risk’ as negative, but did you know that it can also be positive? Prebagaran Jayaraman shares why reframing your mindset around project risk can lead to increased project opportunities – and five ways to make this change

A man holding onto some balloons as he stands over a cliff

“What are the common risks in your project?”

This is a question I often ask those attending my course in project risk management. Typical replies include poor subcontractor performance, lack of technical expertise, fluctuating material costs and the high turnover of expert employees.

What do these answers have in common? They all sound negative.

When asked, most of my course participants are surprised to know that project risk also includes positive effects.

Indeed, the Project Management Body of Knowledge (PMBOK) defines project risk as ‘an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives’.

Project management: a manager’s deep dive

The lack of emphasis on the opportunities in risk stems from a traditional mindset that says risk is primarily something to be avoided. This attitude can lead to a reactive approach to risk management, where the focus is on mitigating potential negative impacts, rather than proactively seeking positive ones.

Neglecting the opportunity aspect of risk can lead to missed advantages.

Understand this, and you’ve taken the first step towards optimising potential future opportunities as part of a project risk management strategy.

Some of the consequences of not optimising opportunities include:

1. Reduced competitive edge. Our project invested in IP rights and technology transfer for shipbuilding technology. Unfortunately, we didn’t capitalise on the opportunity generated by this investment. By not leveraging potential opportunities, organisations may miss out on innovations or strategic advantages that could distinguish them in the marketplace.

2. Underused resources. Projects provide opportunities for new ways of doing things because they are unique endeavours with specific goals, often necessitating innovative solutions. You can then integrate the learnings from these projects into broader organistional practices – leading to continuous improvement, and keeping the organisation agile and competitive. Again, we could have done more if we’d focused on optimising this opportunity.

3. Limited growth. Ships are very safe in the harbour, but that isn’t why we built ships. Organisations that focus solely on risk avoidance may become overly cautious, limiting their ability to grow and adapt to changing business environments.

Here are five ways to capitalise on the opportunities that may be hidden in project risk.

Want to discover five ways to find opportunities in risks?

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