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Risks don’t always have a negative impact on projects. Some risks can actually benefit your project and are known as positive risks or opportunities. As a project manager, your approach to negative risks should be to reduce the impact on the project, while for positive risks, you should increase the likelihood of the risk to take place.
Note: The risk response strategies mentioned here are recommended by the PMI and are part of the knowledge required to take the PMP exam.
On projects, risks can be identified through various project activities, such as during an Iteration Planning Meeting. Whatever the source, there are four ways to deal with positive risks:
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Exploiting a positive risk is about ensuring everything is in place to increase the probability of the occurrence of the risk. Here is an example of exploiting a risk. Suppose, some members of your team have determined a new technique to develop a product and by using this technique, the project duration can be reduced by 20%. To exploit this, you can ensure the technique is used in the project and other team members are trained on the new technique.
Caution: Using new technology to exploit a positive risk may lead to a litany of negative risks, which will need to get mitigated.
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Sometimes exploiting a positive risk is not possible without collaboration. Sharing a positive risk is when you collaborate with another department or organization to exploit a positive risk. For example, after conducting a SWOT Analysis, you have determined that a business deal is worth pursuing. You are required to use Agile development practices. In your company, there is no expertise in Agile development. Hence, you partner with another organization, which has skilled ScrumMasters, that specialize in Agile development. With this collaborative strategy, both parties benefit.
Note: It is common for even competitors to collaborate, such as when car companies share a manufacturing plant to reduce production costs.
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Enhancing a risk involves identifying the root cause of a positive risk so that you can influence it for a greater likelihood of the opportunity occurring. For example, in order for you to get a business deal, your workforce needs to have substantial PeopleSoft skills. You can enhance the positive risk (opportunity) by training your workforce on PeopleSoft or hiring PeopleSoft specialists. Hence, the probability of you getting the deal is increased.
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At times, opportunities simply fall on your lap and you choose to accept them. This is called accepting a positive risk. It also means you are acknowledging that you’d rather not Exploit, Share, or Enhance the risk.
Note: Accepting is a strategy that is applicable to both Negative and Positive Risks. It is important for you to remember this for the PMP exam.
Identifying positive risks and responding to them is a recurring process. This is one of the golden rules to follow while managing risks.