The majority of risk management programs are defensive by nature. They are focussed on identifying the risks that might impact on the organisation’s business objectives and either mitigating the impact or reducing the probability of an event occurring.
However, an holistic approach to risk management also utilises the process to maximise exploitation of opportunities. This recognises that uncertainty might result either in a negative or a positive impact.
During times of uncertainty, or when an event occurs which challenges or threatens the organisation’s business objectives, a mature risk management program will facilitate the exploration of any opportunities which might arise from the situation.
This can be achieved through taking the time to consider whether there is a positive side or opportunity to the identified risk, rather than rushing in with a preconceived notion of needing to control or remove the risk.
Some risks are clearly negative in their consequences and unlikely to have an upside. However, some uncertain situations, if exploited, can result in exceeding targets and objectives, i.e. provide opportunity. For example, changes in the market in which the organisation sells its goods or services might result in a loss of market share (downside) but might also open up new opportunities to enlarge the product and/or customer base (upside).
Taking time to identify the potential upside of risks which can be exploited, and not only the negative impacts which need to be controlled, can provide organisations with the opportunity to not only protect their business objectives, but to exceed them.
Please contact QRMC for more information about turning uncertainty into opportunity.
