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Vol. XI Issue XII - December 2009
Project Management eJournal
RISK DOCTOR BRIEFING :
It’s All About Objectives!
By Dr David Hillson
The Risk Doctor
The most simple definition of risk as “uncertainty that matters” provides two simple tests for whether something is really a risk or not. The first and most obvious characteristic of a true risk is that it is uncertain. If something is a fact, constraint, requirement, problem or issue, then it is not a risk. However not all uncertainties are risks, which brings us to the second test of a real risk: Does it matter? The majority of uncertainties in the universe are not risks because they are irrelevant. The only reason we need to identify, understand and manage risks is if they matter.
So how do you know whether a risk matters or not? Again there is a simple test: If it happened, would it affect achievement of one or more objectives? Objectives define and describe what matters. For projects they tell us about the requirements for outcomes, deliverables, time, cost and performance. Personal objectives may relate to health, career, family or fulfilment. Objectives for organisations might include growing shareholder value, enhancing customer satisfaction, protecting reputation and operating sustainably.
This explicit link between risk and objectives explains why risk management is so important in all aspects of human endeavour:
To read entire paper Click Here
 About the Author Author Dr David Hillson, PMP FRSA HonFAPM FIRM FCMI, is internationally recognized as a leading thinker and practitioner in risk management. He is Director of Risk Doctor & Partners (www.risk-doctor.com), and has worked in over 40 countries. He is a popular conference speaker and award-winning author on risk, with six books on the topic. David has made several innovative contributions to improving risk management, and is well known for promoting the inclusion of proactive opportunity management within the risk process, and for his ground-breaking work in risk psychology. David is an Honorary Fellow of the UK Association for Project Management (APM) and past chairman of its Risk Management Specific Interest Group. He is an elected Fellow of the Institute of Risk Management (IRM), the Royal Society for the Encouragement of Arts, Manufactures and Commerce (RSA), and the UK Chartered Management Institute (CMI). David is also an active member of the Project Management Institute (PMI) and was a founder member of its Risk Management Specific Interest Group. He received the PMI Distinguished Contribution Award for his work in developing risk management over many years. Since 1998 he has been a core author for the risk chapter of the PMBOK Guide®, and is a core author for the PMI Practice Standard for Project Risk Management. David can be contacted at david@risk-doctor.com. To see his latest book, Managing Risks in Projects, published in July 2009 by Gower, visit http://www.gowerpublishing.com/isbn/9780566088674. |
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