Positive Risk is a Double Negative

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1-22 risk
Why project managers should be extra careful with connotation and clarity in the conference room

It’s Monday morning. You’re standing at the front of a conference room with your status report displayed proudly on the large screen behind. Executive management is seated around the table and all eyes are on you.

“What are your project’s top risks?” asks a senior steering-committee member.

“Well, we have a few positive risks that need to be addressed…” you begin to say.

“If they’re positive – why do we need to address them?” blurts out another committee member, clearly confused by your remark.

And so you begin to recite by heart the definition of Positive Risk and its distinction from Negative Risk from your PMP training.

This is going to be a long meeting…

But let’s take a few steps back. What unfolded above was a classic case of miscommunication due to poor terminology. Senior management has little time to waste. They’ve called for monthly status meetings to efficiently and effectively monitor and address any risks and issues in the high-visibility project you’re managing. They’re looking for reasons for concern and reasons to rejoice, but you’ve presented them with what sounds like neither.

Positive Risk and its brother, Negative Risk, were coined by PMI (Project Management Institute) as a way of capturing the risk-reward paradigm with one set of terms as opposed to their separate-but-linked identities. A good thought, but often misunderstood and causing more damage than value because of error in connotation and clarity.

“Positive” generally has the connotation of something we desire. However, “Positive Risk” is undesirable: it implies a risk of over-accruing benefits at the expense of one or more of the triple-constraint elements of schedule, scope, and budget. Given that the project manager’s job is to best manage those constraints, we should NOT accept Positive Risk.

Adding the qualifier ”Positive” removes clarity as to whether we’re tackling risks or opportunities. Since the current frame of reference is managing risks, addressing risky opportunities at this point can detract from sufficiently highlighting real ones. Removing “Positive” as a qualifier helps the project manager focus on managing the risk’s impact on the triple constraint. Opportunities or potential rewards should be captured in a separate format, so that they receive the appropriate attention.

Now, imagine your Monday morning scenario again. Standing in front of your proudly displayed project status report, you indicate that there are some (pause) risks that must be addressed. Management nods heads.

“What can we do to help you resolve them and keep the project on track?” they ask.

You get the help you need, leadership is in full grasp of the situation, and all is good in the world.