#17: Take a portfolio-based approach to risk.


As with shares on a financial market, projects carry compensatory risk is proportion to their value. The greater value — or reward — a successful project would deliver to an organisation, the greater the risk of failure; the easy yet valuable projects are likely to have been already completed.

This analogy with financial markets suggests taking a portfolio-based approach to organisational risk. Rather than relying on the success of only a few high-risk projects, a company should diversify their portfolio of risk by betting on many smaller projects.

Related: 4a1, 17a

© Braden Moore.RSS