There are many misconceptions about the differences between negative and positive risks in project management. Many people think of bad outcomes when they hear the term “risk,” so they incorrectly associate “positive risk” with too much of a good thing that results in something terrible.
But, positive risk in project management is actually a good thing for projects. Below we’ll properly define and provide examples of positive risks, discuss how you can anticipate and respond to these risks, and offer tips on how to best manage them.
What is a positive risk?
To explain positive risks in project management, we first need to define the term "risk." A risk in project management is any unexpected event that could occur and impact your project. Risks can affect any area of your project, including your people, processes, technology, and resources.
Risks are not the same as issues. Issues are things that have already happened, or that you are confident will happen and must be dealt with. You also usually know when an issue will occur if it’s something expected in the future. Risks are events that might happen but are not guaranteed. You also often don’t know when a risk event will take place.
What are the differences between positive and negative risks in project management?
Risks can occur for better or for worse. When most people think of potential events that could impact a project, they typically think of negative risks — bad things that will cause your project to suffer if they happen. But, events that would be good for your project can also happen— these are called positive risks.
To help distinguish between positive and negative risks in project management, some people prefer to refer to positive risks as opportunities and negative risks as threats.
Examples of positive risks
Here are some positive risks in project management examples:
- A potential upcoming change in policy that could benefit your project.
- A technology currently being developed that will save you time if released.
- A grant that you’ve applied for and are waiting to discover if you’ve been approved.
- A request for additional resources, materials, tools, or training that will make your project more efficient if provided.
How to respond to positive risks in project management
There are four primary ways you can choose to respond to positive risks in project management:
- Exploit it. Exploiting a positive risk means acting in ways that will help increase the chances of it occurring. If you’re hoping for additional project funding, following up and pleading your case can help exploit the risk.
- Share it. Sharing a risk means working with others outside of your project who could also benefit from it to try to exploit it. If other project teams could benefit from a new technology, you may work together to speed up the release date.
- Enhance it. Enhancing a positive risk means attempting to increase the opportunity or positive outcome. If you’re seeking grant money, you could apply for multiple different grants to increase the total amount you may potentially receive.
- Accept it. Accepting it means you do nothing and wait to see if the event occurs naturally on its own.
Tips for managing positive risks
Here are some tips for managing positive risks in project management:
- Work with your team to brainstorm and identify potential positive events that will help your project.
- Assess each risk, including how likely it is to happen and its potential impact.
- Create a log or register of all positive risks so you can track them.
- Determine your team’s risk tolerance. How much risk are you willing to actively pursue vs. just accept?
- Note in your log which risks will be exploited, shared, enhanced, and accepted.
- Create action items and assign people responsible for monitoring or handling each risk.
- Identify what signs might indicate that a positive risk event is about to take place.
- Continually monitor the status of the risk and the action plan for responding to it. Make updates to your plan as needed.
Manage positive and negative risks in project management with Wrike
Most project management software can help you manage risks by providing you with a system for logging, monitoring, and reporting on identified positive and negative risks. But Wrike goes beyond that.
Our Project Risk Report uses our proprietary machine learning technology to analyze your projects and predict how likely each one is to complete on time. This project risk assessment takes into account dozens of factors, including project complexity, the number of completed and overdue tasks, the number of assignees, task activity, the history of your previous projects, and more. Sign up for a free trial today and discover how Wrike improves your management of both negative and positive risks!