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WHY RISK INCLUDES OPPORTUNITY

Author: David Hillson, Risk Doctor Limited

Most current risk management standards and guidelines use broad definitions of "risk" which encompass both threat and opportunity. For example the Project Management Institute (PMI) defines project risk as "an uncertain event or condition that if it occurs has a positive or negative effect on project objectives". Similar definitions exist widely elsewhere, covering other types of risk. However many people still find it difficult to understand why this position has been adopted. And without understanding the reasons, there is natural resistance to putting it into practice. As a result, the risk process is not being used as widely as it could be to identify and capture opportunities. There are three main reasons why risk should include opportunity alongside threat:

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