You can measure opportunity with the same yardstick that measures the risk involved. They go together. – Earl Nightingale.
PRINCE2® defines risk as an uncertain event or set of events that, should it occur, would have an effect on the achievement of objectives. So, PRINCE2® sees risk as having a positive (to take profit) and negative (option to loss) efect. Normally, positive risks are referred as opportunities and negative risks as threats.
PMBOK® has the same point of view and states that project risk management objetives are to increase the probability and impact of positive events and decrease the probability of negative events in the project.
- Business Risks: concerning those normal risk of doing business that can result in either gain or loss.
- Pure, or insurable risks: concerning those risks if they materialise can only result in loss.
- Risk event: what might happen to the benefit or detriment of the project.
- Risk probability: the likelihood of occurrence of the event.
- Amount at stake: the extent of loss or gain that could result.
Risk in the Project Lifecycle
Finally, we would like to mention this quote about dealing with uncertainty:
As we know, there are known knowns; there are things we know we know. We also know there are known unknowns; that is to say we know there are some things we do not know. But there area also unknown unknowns; the ones we don’t know we don’t know. And if one looks through te history of this country and other free countries, this is the latter category that tends to be the dificult ones. -Donald Rumsfeld (about Iraq’s weapons of mass destruction)
What is your best advice to deal with uncertainty?
Author: angelberniz (All Rights Reserved by the author).
Source: Original text (based upon first hand knowledge).
Image courtesy of jscreationzs at FreeDigitalPhotos.net.
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