1. Opportunities & Risk Strategies
Rethought
© Gavin Lawrence April 2013

2. The Ansoff Matrix 1957
Market Expansion Diversification
Product ExpansionMarket Penetration
Existing Technology New Technology
ExistingMarketsNewMarkets
Increasing Risk
IncreasingRisk
R
ISK

3. Risk and Innovation
IncreasingRisk
New Level of
Technology & Scope
High Margin
Medium Level
Scope
Medium Margin
Medium Level
Technology
Medium Margin
Easy Technology
Low Margin
Innovation
Project Challenge
$mRETURN
Increasing Risk

4. The Dynamics of Risk and Reward

5. Risk = Reward =
Opportunity to Excel

6. Traditional Risk Management
Strategy
Avoid Risk = Lower Profits =
Lost Opportunities
(Risk Averse)

7. Reinventing the Probability Impact
Matrix (PIM)
VH 5 5 10 15 20 25
H 4 4 8 12 16 20
M 3 3 6 9 12 15
L 2 2 4 6 8 10
VL 1 1 2 3 4 5
1 2 3 4 5
VL L M H VH
47 110
20 47
Divide into 4 quadrants and total the values

8. Rethinking the Risk Management
Strategy
47 110
20 47
Big Opportunity
High Risk
High Return
Intense Project & Risk
Management
Requirement
Medium Return
High Standard Quantitative
Risk Management
Off-Radar Risks
Show Stopper?
Potential Engineering
Opportunity
Constant Vigilance
Very High Standard of
Quantitative Risk
Management Required
High Standard
Quantitative Risk
Management
Risk = Opportunity =
Project Management Intensity
Redraw with proportionate areas to
create a new risk-reward graphic

9. What is important?
• New focus on the opportunities
that high risks create for
return maximisation (consistent with
business strategy thinking)
• The areas are now indicative of both the Project
Management effort and return potential
• Risks highlight opportunities for innovation and
creative solutions which is good thing
• A full risk register represents a project under control
and well managed with challenges well understood
Big Opportunity
High Risk
High Return
Intense Project & Risk
Management
Requirement
Medium Return
High Standard Quantitative
Risk Management
Off-Radar Risks
Show Stopper?
Potential Engineering
Opportunity
Constant Vigilance
Very High Standard of
Quantitative Risk
Management Required
High Standard
Quantitative Risk
Management

10. Big Opportunity
High Risk
High Return
Intense Project & Risk
Management
Requirement
Medium Return
High Standard Quantitative
Risk Management
Off-Radar Risks
Show Stopper?
Potential Engineering
Opportunity
Constant Vigilance
Very High Standard of
Quantitative Risk
Management Required
High Standard
Quantitative Risk
Management
Healthy, Wealthy and Risky !!!