How to Respond to Positive Risks

How to Respond to Positive Risks

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:

    Exploit
    Share
    Enhance
    Accept


Exploit
Exploiting a positive risk is about ensuring everything is in place to increase the probability of the occurrence of the risk.

Share
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

Enhance
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 occurrin

Accept
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 AcceptPositive are acknowledging that you’d rather not Exploit, Share, or Enhance the risk.

http://www.brighthubpm.com/risk-management/48400-how-to-respond-to-positive-risks/

Risk breakdown structure

Risk breakdown structure
Risk Breakdown Structure (RBS) - A hierarchically organised depiction of the identified project risks arranged by category

When planning a project to meet targets for cost, schedule, or quality, it is useful to identify likely risks to the success of the project. A risk is any possible situation that is not planned for, but that, if it occurs, is likely to divert the project from its planned result. For example, an established project team plans for the work to be done by its staff, but there is the risk that an employee may unexpectedly leave the team.

In Project Management, the Risk Management Process has the objectives of identifying, assessing, and managing risks, both positive and negative. All too often, project managers focus only on negative risk, however, good things can happen in a project, "things" that were foreseen, but not expressly planned.

The objective of Risk Management is to predict risks, assess their likelihood and impact, and to actively plan what should be done ahead of time to best deal with situations when they occur.

The RBS can also help the project manager and the risk manager to better understand recurring risks and concentrations of risk that could lead to issues that affect the status of the project

http://en.wikipedia.org/wiki/Risk_breakdown_structure

The PMI Code of Ethics and Professional Conduct

The PMI Code of Ethics and Professional Conduct
Interpersonal project team conflicts. Challenges with project sponsors. Vendor negotiations. Cultural differences. Government regulations. Project professionals interact with many different types of people, and often are faced with various ethical dilemmas throughout their careers.

Deciding what is ethical can be challenging, and the answers may differ depending on your organization and culture.

To provide some guidance, PMI volunteers helped to develop the PMI Code of Ethics and Professional Conduct. All PMI members and credential holders must sign the code, agreeing to adhere to a high standard of ethical behavior.

http://www.pmi.org/en/About-Us/Ethics/~/media/PDF/Ethics/ap_pmicodeofethics.ashx

Contingency reserve vs. management reserve

• Contingency reserve vs. management reserve 

both refer to money used to account for a risk that has triggered, there is a difference.

    Contingency reserve - This is your fund for “known-unknowns“. That means you’ve already identified the risk; you just don’t know how much it will impact your project. This can be estimated based on the sum of all of your risks’ expected values.
    Management reserve - This is for the “unknown-unknowns“. Basically, you didn’t even identify the risk until it has occurred. This may be derived from using percentage of the overall project budget.
   
http://pmsecrets.blogspot.com/2008/01/contingency-reserve-vs-management.html

• Contingency Reserve vs Management Reserve

Contingency Reserves: Contingency Reserve is the cost, or time reserve that is used to manage the identified risks or “known-unknowns” (known=identified, unknowns=risks). Contingency Reserve is not a random reserve, it is a properly estimated reserve t based on Expected Monitory Value (EMV), or Decision Tree Method.

Contingency Reserve is controlled by the project manager. He has the authority to use it when any identified risk occurs, or he can delegate this authority to risk owner, who will use it at appropriate time and informs the project manager at later stage.

Management Reserve: Management Reserve is the cost, or time reserve that is used to manage unidentified risks or “unknown-unknowns” (unknown=unknown, unknowns=risks). Management Reserve is not an estimated reserve, it is defined as per organization’s policy. For some organization, it is 5% of total cost, or time of the project and for some others – 10%.

Management Reserve is controlled by someone outside the project team, usually from the management. Every time, when an unidentified risk occurs, project manager has to take approval from the management to use this reserve.

Here discussion about the contingency reserve and management reserve finishes, but before we leave let us summarized all key points once again:

Contingency Reserve:

    used to manage identified risks
    estimated based on Expected Monitory Value (EMV), or decision tree method
    project manager has authority to use this reserve.

Management Reserve:

    used to manage unidentified risks
    calculated as a percentage of cost, or time of project
    required management approval to use this reserve.

http://pmstudycircle.com/2012/02/contingency-reserve-vs-management-reserve/#axzz29h4Sxbij

Risk Register

Risk Register
A Risk Register is a Risk Management tool commonly used in Project Management and organisational risk assessments. It acts as a central repository for all risks identified by the project or organisation and, for each risk, includes information such as risk probability, impact, counter-measures, risk owner and so on. It can sometimes be referred to as a Risk Log (for example in PRINCE2).
http://en.wikipedia.org/wiki/Risk_register

Manage Stakeholder Expectations Process

The process of communicating and working with stakeholders to meet their needs and addressing issues as they occur.

• Inputs

Stakeholder register

Stakeholder management strategy

Project management plan

Issue log

Change log

Organizational process assets

• Tools and Techniques

Communication methods

Interpersonal tools

Management tools

• Outputs

Organizational process assets updates

Change requests

Project management plan updates

Project document updates


http://leadinganswers.typepad.com/leading_answers/104-manage-stakeholder-expectations.html