Recently, we have been discussing the theory and importance of Risk Management in project planning and management. In order to manage risks in a project, there are several tools used to plan for all possible negative impacts on a project. Project managers fill out several charts, analyzing the likelihood, severity, impacts, warning signs for each possible risk. They construct a specific budget for necessary preventative measures and possible contingency plans required to mitigate these risks.
In Risk Management, some big questions have to be answered: whats the likelihood of this risk happening? And how much (money, time, resources, etc) is it going to cost me?
One interesting topic discussed was the recent emergence of opportunity management as a core strategy to help design a project. The conversation got me to thinking about the utility of managing your opportunities. Incorporating opportunity management in projects, specifically, in the analysis of Corporate Responsibility projects, could have a large positive impact in helping to change popular opinion surrounding the topic.
Often, Corporate Social Responsibility (CSR) is viewed by companies as an expense. CSR projects are added costs that must be undertaken in order to gain reputation in the market and/or in order allow a company to maintain “business as usual” practices.
The CSR sector is working to shift away from being thought of as “philanthropy”. CSR professionals are trying to make social and environmental responsibility part of the company’s main goals and core functions.
So, what if the idea of CSR being a “necessary expense” could be turned into a belief that CSR can, and does, bring added benefit to a company’s bottom line? (and even more benefit if a company is considering its “triple bottom line“)
This is where opportunity management comes in. It answers the big question: what opportunities and benefits (time, money, reputation, environmental protection) can I gain from this project?
Some companies are already thinking in terms of opportunity and benefits when creating and institutionalizing their Corporate Responsibility. Take Starbucks as an example, who has pledged to support fair trade coffee farmers and has been working on ways to decrease waste in their production lines and stores. Now, many customers see Starbucks as a company that is socially responsible and has better business practices. They are not perfect , but they have been able to improve their corporate practices and benefit from these effort.
Another really great example I read recently was by Libri, a Hungarian specialty book retailer looking to penetrate the book market in Romania. The company had several obstacles to face:
The language barrier – typically, book retailers stay within native language markets or distribute in other markets in their native language
The low book sales in Romania – only 17% of Romanian citizens bought books in 2006, compared to 54% in the US and 82% in Hungary
Strong competition – their main competitor already had 71 stores throughout the country
History – The two countries have a long history of border disputes over Transylvania.
So what did Libri do? They put together a CSR project dedicated to focusing on each group of stakeholders: suppliers, employees, and their customers/community. One specific project to note: the D.E.A.R. (drop everything and read) Program, in which employees took 2 hours out of their work week to go and read to children at local public schools.
In the end, through these projects the company was able to penetrate the market. They gained the reputation of being a company that had real and meaningful corporate responsibility.
Now that is true opportunity management.