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Vol. XII Issue V - May 2010
Project Management eJournal
PM ADVISORY:
Risk Doctor Briefing
The Definition Debate Continued
By Dr David Hillson
The Risk Doctor
Most of us had hoped that the debate about how to define a risk was settled. This was a “hot topic” around the turn of the century, particularly focused on the question of whether the concept of risk should include opportunity as well as threat, or whether risk was exclusively negative. The majority consensus now seems to be agreed that risk is double-sided and covers both upside and downside.
Now the issue of the ISO31000 “Risk management – Principles and guidelines” standard (published in November 2009) looks likely to reignite the definition debate, and this time the issue is equally fundamental. At first sight the definition of risk in ISO31000 appears to be clear and unambiguous, with just five words: Risk is “effect of uncertainty on objectives”
This contains all three vital words that any definition of risk must include.
Risk is about uncertainty and it may never happen.
Risk matters and must be managed because it has an effect.
We measure that effect against defined objectives.
So far so good. But looking more closely at the ISO31000 definition, a problem appears. The ISO risk standard clearly states that “Risk is effect…” If we follow this approach, we would define the following as negative risks: delay, overspend, accidents, reputation damage, lost market share, inefficiency etc.
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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