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PMBoK7 Perspectives: Exploiting Opportunities

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PMBoK7 places more emphasis on managing positive risks, called opportunities (situations that improve project outcomes.) In the past, this project approach was underutilized, because the tendency is to focus on negative risks (called threats.) Here are PMI’s five approaches to making the most of project opportunities. 

  • Exploit. To exploit opportunity, you can take definitive action to ensure that an opportunity occurs. For example, you could purchase a more capable technical component that increases the business value delivered by the project. Or I could respond to a clear-cut customer demand by adding a remote-control feature to a ceiling fan. This would generate customer satisfaction and greater sales by fulfilling a specific need. 
  • Enhance. Enhancing an opportunity means taking an action to increase the probability of the opportunity occurring and/or increasing the positive impact it has on your project if it does occur. This is the equivalent of mitigating a negative risk. For example, to increase the reliability of a product, you decide to install a redundant part within the product, so if one fails the other automatically takes over. The outcome is a better product that you can charge more for, increasing the probability that your profit will improve due to the increased sales and higher customer satisfaction.
  • Escalate. A project team might discover ways to improve project outcomes that are outside the project team’s sphere of influence, for example, dealing with transactions involving foreign currencies. Changing the payment schedule or requesting a payment could mean big differences in currency exchange rates. Senior managers or the finance organization would make the decision on this financial schedule change. In this case, the project manager escalates the opportunity to the people who have the authority for the decision. 
  • Share. This strategy means you allocate full or partial ownership of an opportunity to a third party who is best able to capture the benefit of that opportunity. For example, a customer offers a bonus payment for early project completion. To increase the chances of finishing early, you hire an expert firm to perform parts of your project and share the bonus payment with them if you finish early.
  • Accept. Finally, just like with threats, you can accept the existence of an opportunity as-is.  You do nothing, and hope the opportunity comes to fruition. This is suitable for low probability or low impact opportunities.

If you have techniques you have used to take advantage of opportunities, share with us in the comments section.

For more about risk management, check out Bob McGannon’s Project Management Foundations: Risk course.

Less Well-known Benefits of Risk Management

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Project management disciplines such as risk management bring control to a project. In addition to the well-known benefits of these disciplines, they provide other benefits that aren’t often discussed or recognized. Here are a few additional benefits that risk management provides:

Encourages optimism. Thinking about what could go wrong increases optimism? It seems counter-intuitive, and yet it does! Plans for responding to risks can encourage the team. Whatever may arise, you have already identified an action to take! In addition, planning for positive risks (also called opportunities) can increase the chance of good things happening and ensure that you make the most of them when they do. That’s certainly cause for optimism! 

Reduces pressure. Project managers face enough pressure without having to develop solutions to issues on a moment’s notice. With risk management, you will have pre-planned responses to events that occur: you’re ready to execute the plan so the team can take action quickly.

Even if a problem arises that isn’t in your risk management plan, a team that’s used to managing risk can jump in to discuss alternatives and develop responses. You do not have to deal with it alone!

Identifies possibilities. Productive risk identification and response planning meetings can unearth more than doom and gloom responses. You might launch risk-reducing actions proactively, which not only addresses risks, but can also increase project value. For example, say you proactively engage a skilled resource to reduce risk. That person’s skill and experience might uncover possible solutions that expand the value the project delivers to the business.

Increases focus on outcomes. Focusing the project team on risk regularly during status meetings keeps the project purpose front of mind. While project team members naturally focus on their specific tasks, risk management provides focus on what might jeopardize project outcomes, and how team members can work with each other and management to produce project outcomes as planned.

Have you come across other benefits of risk management that aren’t typically discussed?

For more about risk management, check out Bob McGannon’s Project Management Foundations: Risk course.

How to Recover From a Mistake

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Photo by Tim Gouw on Unsplash

Even the most experienced project manager will occasionally make a mistake – a flaw in the project plan, misinterpreting business directions, or overlooking an issue or risk. Here are a few tips on how to recover when you make a mistake in a project:

  • Take ownership. The quicker you take ownership of what happened, the sooner you can work on fixing the problem. You want your team to focus on solving the problem, not blaming one another for what happened.
  • Fully understand the issue or mistake. You need to understand the problem before you can make adjustments to the project. Interview key clients and team members to understand the issue. Then, analyze the facts and assumptions used to make project decisions. For example, confirm that information presented as fact is actually fact. Verify that the initial assumptions used to move forward with the project are still valid. If you discover invalidated assumptions, determine what needs to be confirmed before making those assumptions in future projects. After you collect this information, present the full story of the issue and corrective actions to management.
  • Craft response alternatives. The best project managers quickly develop possible response for addressing project issues. If appropriate, present these alternatives to management so they can decide which one to choose – and you can act quickly. If you won’t have responses identified before you discuss the mistake with management, tell them how you will design your responses and when you will present them for consideration.
  • Update your risk management plan. When a mistake is made, you want to reduce the chance of the mistake being repeated. Add information about the mistake and how you handled it to your risk plan and register for your project — and update any other data sources project managers consult for project guidance. If a risk response was inadequate or inappropriate, update the documentation and review the situation with team members involved in drafting or confirming the risk response. Learning is the best way to prevent future mistakes, which brings me to my last tip…
  • Turn the event into a learning moment. When an error is made, it can be tempting to lash out. Focus on what leadership expert John C. Maxwell calls “failing forward.” Educate your stakeholders to make them better project advocates. By turning a mistake into a learning moment, you can increase the capability of your organization.

If you have other suggestions for recovering from a mistake, please add them in the comment section.

For more about risk management, check out Bob McGannon’s Project Management Foundations: Risk course.