Risks are an aspect of project uncertainty and their potential presence certainly adds to a project’s level of complexity. The PMBOK defines risk as “an uncertain event or condition that, if it occurs, can have a positive or negative effect on one or more objectives.”
Notice that risk is not only negative (threats). Risk can be positive (opportunities).
Like scope, schedule, budget, resources, and many other project elements, risk is estimated/anticipated in the planning stages of a project and then continuously addressed throughout the project.
Embedded in planning for risk is an organization’s risk attitude, appetite, and threshold. These will influence how risk is addressed. Responses to risk should be appropriate for the significance of the risk, ideally cost effective, realistic within the environment of the project, agreed upon by stakeholders, and owned by someone – perhaps the project manager, a centralized support team like a PMO, or another governance body.
Some projects may have risk around the deliverable meeting regulatory requirements. In this case, a predictive approach may be useful to build in testing, documentation, processes and procedures that aid in passing requirements. If a project has risk around stakeholder acceptance, an iterative approach to the deliverable may be necessary to generate feedback before developing more features and functions of the deliverable.
Ideally, project teams will maximize positive risks and decrease exposure to negative risk.
Want to learn more about Project Management? See my Project MGMT publication for these 30 key PM topics:
Projects, lifecycle, management, manager, methodologies, the triangle, stakeholders, deliverable, team, charter, scope, budget, schedule, planning, baselining, milestones, dependencies, resources, risk, procurement, communication, ceremonies, integration, backlog, whiteboard, closure, software tools, office(r), code of ethics, body of knowledge
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