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Dealing With Options - AvNetwork.com

Dealing With Options

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It seems that opportunity ebbs and flows like the tides. Recently it seems like a game of Whac-A-Mole around here, with lots of potential projects coming in, leaving us wondering which to select and which to avoid. Exactly how does one make the best selection, increasing one's rewards while minimizing potential losses?

I'm not convinced Whac-A-Mole is the right approach for dealing future planning. This arcade machine consists of a soft mallet used to pound on dummy heads that randomly pop up from a waist-level cabinet. The more heads you hit, the higher your score. The heads pop up slowly to begin with and then accelerate as the game progresses.

So how does one develop the appropriate response processes to both minimize threat and maximize opportunity? A commonly used tool is called a risk management plan. Generally speaking, a good risk management plan contains several key components: a definition as to who owns the risk, probability for success, impact, and urgency. It often involves thresholds specific to resources, cost, and time. Generally a schedule is included.
Often a risk register is also included, which prioritizes each project and its risks-near- and long-term risks, qualitative risk analyses, and a watch list dealing with lower priority risks. Once completed, a risk register comprises two main parts for dealing with positive and negative risks.

The three strategies for negative risks are avoidance, transfer, and mitigation. Nothing different than what we do everyday in our own lives. Avoidance changes the plan and typically involves removing a threat by changing or reducing scope. Transfer generally involves moving the risk to someone else and paying them a premium to do so. Mitigating the risk reduces the impact to an acceptable level, often by adding redundancy or making the process less complicated.

Positive risks are all about exploiting the opportunity to maximum effect. The three strategies are generally broken down by where one shares, enhances, and eventually exploits the risk.

Sharing responsibility and accountability with another may give a team a great chance to effectively seize an opportunity. Enhancing a risk involves increasing the probability of success by improving the chances of the trigger conditions. Exploiting a risk involves using the best people and technology available to rapidly affect a positive outcome.

So once we're done thinking through our response strategies and contingent responses, we hope to make the best choices. Like Whac-A-Mole, we're pounding away right now, hoping we're making the right decisions and aligning with the right folks.

Summer is a great time to plan and think about future opportunities, as well as develop new skills. The latter could include getting a LEED certification, the appropriate contractor's license, implementing a CRM plan, or figuring out a way to drive new business to your website. The sheer amount of easily available content associated with these activities on the web is amazing, and many of the tools are free for those willing to take a few minutes to figure them out.

Planning for success certainly beats the Whac-A-Mole approach for figuring out how to most efficiently use one's limited resources. A good response plan for the future is important, and it works in tandem with choosing a quality strategic direction that allows one to quickly quantify whether an opportunity is in one's best long-term interest.

Related

Too Clever By Half

So what do you do when you underbid a major long-term project? Even with the best of intent and procedures, it still happens. I've found there's 600-year-old expression, "Too clever by half," which often sums up the situation quite nicely.