How to Cash In on Project Opportunities

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Some project managers have a defensive mindset. They focus on threats only when opportunities abound. Let's increase our chance of success by seizing project opportunities too.

Self Assessment Quiz

1.  To enhance an opportunity means:

  • a) The opportunity is escalated to the project sponsor
  • b) The probability and/or impact is increased
  • c) The opportunity becomes a benefit
  • d) The opportunity is seized

2.  What does it mean to exploit an opportunity?

3.  True or False? Project managers may use qualitative and quantitative risk analysis to evaluate opportunities.

Reveal the Answers

What is an Opportunity?

Many individuals lack clarity about opportunities. Consequently, these project managers and team members fail to take advantage of these upside risks. Let's define opportunity.

The PMBOK® Guide defines risk as "an uncertain event or condition that, if it occurs, has a positive or negative effect on one or more project objectives."

Furthermore, the PMBOK® Guide defines an opportunity as "a risk that would have a positive effect on one or more project objectives." Therefore, negative risks are considered to be threats and positive risks are opportunities.

Is an Opportunity a Risk, Really?

I am a member of some project management LinkedIn Groups that have had heated debates concerning whether an opportunity is a risk. Some people define risks as uncertain events or conditions that has negative affects on project objectives only. Why do they think this way?

The Merriam Webster Dictionary defines risk as "the possibility that something bad or unpleasant (such as injury or a loss) will happen."

More modern definitions of risk include the possibilities of upside risks. When planning for your projects, define the term risk and determine how you will identify and manage both threats and opportunities. Include your definitions and processes in your risk management plan.

How to Get Started

When you meet with your project team, here are some questions you may wish to use:

What are three opportunities that we can exploit or enhance that would significantly improve our chance for success? What are some positive things that may happen?

  1. ____________________________________________________
  2. ____________________________________________________
  3. ____________________________________________________

What is one response that we can implement for each opportunity that can improve the probability and impact?

  1. ____________________________________________________
  2. ____________________________________________________
  3. ____________________________________________________

When leaders ask questions like these, team members have a chance to use their creative skills to solve problems and advance their projects.

Tools for Identifying Opportunities

Here are some tools for identifying opportunities. I am partial to brainstorming. However, I like to mix it up from time to time by using other identification tools.

  1. Interviews. Select key stakeholders. Plan the interviews. Define specific questions. Document the results of the interview.
  2. Brainstorming. I will not go through the rules of brainstorming here. However, I would offer this suggestion. Plan your brainstorming questions in advance. For example, what are the most significant opportunities related to the schedule, budget, scope, or quality?
  3. Checklists. See if your company has a list of the most common opportunities. If not, you may want to create such a list. After each project, conduct a post-review where you capture the most significant opportunities. This list may be used for subsequent projects.
  4. Cause and Effect Diagram. Project managers can use this simple method to help identify causes of opportunities. If we enhance the cause, we can increase the probability and/or impact of the opportunities.
  5. Affinity Diagram. The affinity diagram is a fun, creative, and beneficial exercise. Participants are asked to brainstorm opportunities. Ask participants to write each opportunity on a sticky note. Then participants sort the opportunities into groups or categories. Each group is given a title.

Keep in mind - identifying opportunities is an iterative process. Why? New opportunities may surface at any point in the project life cycle. Determine how often you will invest time in identifying opportunities.

Think Outside the Box

When identifying opportunities, look at changing dynamics outside of your project. Here are some examples:

  • Your software development project is behind schedule. Another project is closing and releasing a development resource that could greatly help get your project back on schedule.
  • You've just heard that your unengaged project sponsor plans to retire in three months while your project's end date is ten months away. You know a great candidate to fill the sponsor role.
  • The Quality Assurance/Testing Team (QA) has an open window with little on their plate. You could ask QA to start some preliminary testing, putting your project ahead of schedule.

Here's another tip. Consider engaging people outside the project to identify opportunities. These individuals can bring a fresh perspective.

"There is no security in life; only opportunity." –General Douglas McArthur

Where Will You Capture Opportunities?

If you define opportunities as risks, then you will capture the opportunities in your risk register. If not, then consider creating an opportunity register. Either way, it is critical to have a repository. Otherwise, you will likely lose sight of the potential upside events and conditions.

Evaluating Opportunities

Let's assume you have a list of twenty opportunities. You and your team will not likely be able to seize all the opportunities. How do you know which ones are most significant?

You will need some method of prioritization. Here are the two primary methods:

  • Qualitative analysis: Rate each opportunity in terms of probability and impact on a scale such as 1 to 5, 5 being the most likely or greatest impact. Multiply probability times impact resulting in an opportunity score.
  • Quantitative analysis: Calculate the potential benefit by multiplying the probability times the estimated value. For example, let's assume you think the opportunity is 40% likely to occur and there is a benefit of $20,000 to the project. 40% x $20,000 = $8,000 expected monetary value.

Responding to Opportunities

Now the question is how will we respond to the most significant opportunities. The strategies for opportunities include:

  • Exploit. Ensure that opportunity is realized (e.g., purchase a higher quantity of materials in order to get additional price discount).
  • Accept. Acknowledge the potential opportunity but take no action unless it occurs.
  • Enhance. Increase the probability or impact of an opportunity (e.g., add more resources to the task).
  • Share. Assign all or part of the opportunity to a third party.

Monitoring Opportunities

Of course, new opportunities will surface over the life of your project. Periodically review the opportunities. Has the probability and impact changed? Is it time to exploit or enhance opportunities? Are there new opportunities?

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