4 Types of Project Risk – Different Forms of Uncertainty | Video

A project risk is simply ‘uncertainty that can affect outcome’.

And when we classify risks, we focus on the types of impact that they can have:

• Schedule
• Budget
• Technology
• People
• Compliance
• Political
• …etc

We rarely think of the differences in the kinds of uncertainties. Yet, differences there are. And they are important.

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Classifying Project Risks by Uncertainties

We rarely think of the differences in the kinds of uncertainties. Yet, differences there are. And they are important.

The easiest classification is into:

Known-knowns

Risks we know all about, but their occurrence remains random

Probabilistic risks – aka Aleatory risks

Known-unknowns

Risks that arise from gaps in our knowledge, which we are aware about

Reducible risks – aka Epistemological risks

Unknown-unknowns – or ‘unk-unks’

Gaps in our knowledge about which we are wholly ignorant

Fog of ignorance, or ‘Black Swans’ – aka Ontological risks

For more about Black Swans, see ‘What is a Black Swan?’

Unknown-knowns

Things we do have knowledge of – but that it has been lost or obscured

Hidden knowledge – aka Latent risks

Recommended Videos.

Carefully curated video recommendations for you:

• What is Project Risk Management?
• What is Risk Tolerance?
• How to Manage Project Risk
• What to Put in Your Risk Register (Risk Log)
• Risk Management – 5 Tips to do it right

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