The approach of managing overall project risk challenges existing practices in risk management by shifting the focus from individual risks to the collective impact of all risks. Traditional risk management often focuses on mitigating individual risks within a project. However, managing overall project risk involves considering the cumulative effect of all risks and how they interact with each other. This approach requires a broader perspective and a more strategic approach to risk management. It also necessitates a change in mindset from risk avoidance to risk optimization, where the goal is not just to minimize risks but to balance them against potential rewards.

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Potential obstacles companies might face when trying to manage overall project risk include lack of understanding of the overall project risk, focusing too much on individual experiment risks, and not having a diverse spread of experiments with varying impact and success rates. To overcome these obstacles, companies should focus on the overall project risk instead of individual experiment risks. They should also create a diverse spread of experiments with high and low impact and high and low success rates. Additionally, they should have clear rules for when to initiate and stop experiments.

A startup can use the concept of long-term optionality to grow by setting a budget that considers each experiment's impact on the overall portfolio's long-term optionality, near-term impact, resilience, and performance. The financial goal should be to manage overall project risk instead of individual experiment risks. The startup should create a spread of experiments with high and low impact and high and low success rates. Clear rules for when to initiate and stop experiments should be established.

A retail business can apply the approach of managing overall project risk by setting a budget that considers the impact of each experiment on the overall portfolio's long-term optionality, near-term impact, resilience, and performance. The financial goal should be to manage the overall project risk instead of individual experiment risks. The business should create a spread of experiments with high and low impact and high and low success rates. Clear rules for when to initiate and stop experiments should be established.

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