Why Opportunity in projects should never be called ‘Risk’!

 

Why this really makes no sense at all – and can even be very damaging:

Something has crept into project management texts on both sides of the pond in recent times, (although PMBoK®  from PMI has recently reversed this – see footnote). It’s the practice of classifying opportunity as ‘positive risk’ and trying to manage them via a single process.  This bothers me, a lot and here’s why.

  1. Project risk management is an important and poorly understood and practiced element of project management.
  2. Many educated people involved in projects in large-scale businesses apply project risk management very poorly and that includes quite a number of project managers.  We have stacks of physical evidence to back this up, from many different countries, not just the UK. If you review the content of many real risk registers (as we have in many dozens of organisations) you will instantly find very poor content in those documents.
  3. Unhelpful use of language makes poor practice even worse.
  4. So, now we also have the situation where ‘opportunities’ are also classified as risk.  It is also recommended by some that we manage them together via a single process. This confuses people even further when we are already dealing with a poorly understood subject.

And this is the key as to why this is wrong:

  1. The common human use of the term ‘risk’ in everyday life always revolves around ‘chance of danger’, or ‘chance of loss’.  ‘Loss’ and ‘danger’ in this context are never positive outcomes. Think of it this way. Would we ever say: “if I walk near the edge of the cliff top on a foggy day, there is an opportunity I might fall off?” Risk always has a negative effect and opportunity has a positive one. They are not the same.  It explains why you have to start talking about “positive risk” if you classify opportunities as risk. Frankly, it’s a nonsense but much more important is that is damages the risk process when you engage with people on real projects and have to try and explain all this (nonsense).
  2. Furthermore, opportunities also miss both tests completely when we look for and discuss and classify ‘risk’:
    • Opportunities do not carry danger; they should all carry positive outcomes to the project, or the end product, or both.
    • In addition, they do not have to exhibit uncertainty either at all. Risk always carries uncertainty but opportunity does not have to.
  3. Lastly, it would likely be unproductive in most businesses to try and run a session that looked at both risk and opportunity together.  It would lead to a very unfocused session and likely confuse those involved. Our advice would be to look at them separately and call them what they are.

risk-danger

 

And this is even more important:

  1. In real life and business, not just in textbooks, when we conduct risk assessments, we often have to engage with people who have never done this before and may even never do it again. Such counter-intuitive language is very unhelpful. It can even harm the process, considerably.

Communication (even when we all share a common language) is one of the most challenging things on projects, and communication issues can be a huge source of problems.  Why would we want to make this task tougher than it needs to be?  It makes no sense. By all means, discuss and manage risks and opportunities of course, but call them that – risks, and opportunities.  They are not the same at any level.

Footnote – PMBoK backing-out of the Trend: The PMI’s PMBoK® Edition 5, in 2013 published the following note in relation to its updates on project risk management, in Section  X1.19 Section 11:

  • “changes were made to move the emphasis away from the use of the term “positive risk” toward “opportunity” in line with feedback from the Project Management community”.

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