I was preparing a project proposal before christmas and we were trying to define what a risk was (Again!). Some mediocre (if the cap fits……) project managers think to improve their credibility by saying risk every other word. I offer you (& them) the following, although its not original,
“A risk is an event that is futuristic, uncertain and detrimental.
Its a new FUD!
One important corollary (for which I thank Andy Murray recently of WPM) is that effort estimation variance is not a risk, since its not uncertain. – You will be wrong!
I thought of you recently when I was engaged in a discussion on the difference between a Project Risk and a Project Issue. I was advocating the three part test of “uncertain, futuristic and detrimental” when one person claimed that an Issue is a Risk with 100% likelihood of occurrence! I finally uncovered that the desire to describe it in such a way was so that the Project Manager could put all his issues and risks on his Risk Log. Although it made me laugh, the serious point is that Issues and Risks are different. You may or may not need to manage any given risk since it may or may not happen. Therefore judgement is required as to the cost-effectiveness of any mitigation or contingency strategies. Whereas, Project Issues definitely will happen (or have happened) therefore must now be accommodated within the project plan.
By the way, I’m now at Outperform (www.outperform.co.uk) Regards Andy
Posted by Andy Murray on July 25, 2006 at 11:46 PM PDT
Originally posted on my Sun/Oracle blog, republished here in Feb 2016