A Risk is an uncertain event or condition that, if it occurs, will have a positive or negative effect on one or more portfolio, program, or project objectives. Risks are inherent to all initiatives and may impact scope, schedule, cost, quality, or stakeholder satisfaction.
Risks are proactively identified, assessed, and managed through structured processes to maximize opportunities and minimize threats.
Key Characteristics
- Uncertain in Nature – May or may not occur
- Can Be Positive or Negative – Includes both opportunities and threats
- Impact-Focused – Evaluated based on effect on objectives
- Requires Response – Calls for action planning, monitoring, and control
Example Scenarios
- A supplier delay might cause a milestone to slip (negative risk or threat)
- A new technology could speed up production if adopted early (positive risk or opportunity)
- Unexpected regulatory changes might introduce cost overruns (threat)
Why Risk Matters
- Improves Preparedness – Enables proactive mitigation and contingency planning
- Protects Project Objectives – Minimizes disruption and negative outcomes
- Uncovers Opportunity – Allows teams to exploit positive uncertainty
- Enhances Decision-Making – Informs prioritization, trade-offs, and strategy
See also: Issue, Opportunity, Threat, Risk Management, Risk Register.