Risk Management

Active acceptance

when a risk is recognized and mitigated by a contingency plan with triers that will activate that plan when needed.

Alternatives analysis

Breaking down a complex situation to generate and evaluate different solutions and approaches.

Ambiguity

A state of being unclear, having difficulty in identifying the cause of events, or having multiple options from which to choose.

Complexity

the state of having a large number of interconnected and interdependent parts or variables.

Contingency reserve

Time or money allocated in the schedule or cost baseline or known risks with active response strategies.

Crisis

An adverse situation in which urgent decisions are required to prevent the situation rom deteriorating further.

Decision tree analysis

used to support the selection of the best course of action out of several alternatives.

Expected Monetary Value (EMV)

a quantitative risk analysis method that consists of calculating the average outcome of various risks, factoring in their probabilities and associated costs or benefits.

Fallback plan, Plan B

used when a risk occurs and the primary response proves to be inadequate.

Inherent risk

the level of risk that you start off with before even beginning your project.

Issue

a problem or concern that arises during a project or process, requiring attention and resolution to prevent potential negative impacts.

Issue log

used to record and monitor active issues. Issues are assigned to a responsible party or follow-up and resolution.

Known unknown, Identified risk

A risk that you’re aware of.

Manageability

The ease with which the risk owner (or owning organization) can manage the occurrence or impact o a risk. Where management is easy, manageability is high.

Management reserve

An amount of the project budget or schedule under management control that is reserved or unforeseen work within the project scope.

Monte Carlo analysis, Monte Carlo simulation

A risk analysis technique that consists of running hundreds or thousands of simulations, each time using a different set o values rom the cost and duration risk model inputs. The result is a total estimate or project cost or schedule presented as a range.

Opportunity, Positive risk

a potential event or circumstance that can positively impact the project i it occurs.

Qualitative risk analysis, Risk assessment

The process o prioritizing risks by assessing their probability o occurrence and impact.

Quantitative risk analysis, Risk analysis

The process of numerically analyzing the effect of identified risks on the project to make informed decisions about their management.

Residual risk

the amount of risk left after applying the risk response.

Risk

An uncertain event or condition that, i it occurs, has a positive or negative effect on the project.

Risk acceptance, Risk retention, Passive acceptance

A risk response strategy whereby the project team decides to acknowledge the risk without taking any proactive action apart from periodic review to ensure that the risk does not change significantly.

Risk appetite

The degree of risk an organization or individual is willing to accept, balancing potential benefits with potential losses.

Risk audit

used to verify adherence to risk standards and processes. Usually conducted by an external auditor.

Risk-averse

A person or organization that is not comfortable with risks or has a low tolerance or risks and tries to avoid them unless the reward is high enough to outweigh their aversion.

Risk avoidance

A risk response strategy whereby the project team acts to eliminate the threat or protect the project from its impact.

Risk Breakdown Structure

A hierarchical representation o potential sources o risks.

Risk categorization

The process of categorizing risks by sources, area of the project affected, common root causes., etc. It’s used to determine the areas of the project the most exposed to risk.

Risk enhancement

A risk response strategy whereby the project team acts to increase the probability of occurrence or impact of an opportunity.

Risk escalation

A risk response strategy whereby the team acknowledges that a risk is outside of its sphere o influence and shits the ownership of the risk to a higher level o the organization.

Risk exploiting

A risk response strategy whereby the project team acts to ensure that an opportunity occurs.

Risk exposure

An aggregate measure of the potential impact of all risks in a project.

Risk identification

The process of identifying all possible risk events on a project.

Risk management

the process of identifying, classifying, analyzing, prioritizing, and mitigating risks on a project.

Risk Management Plan

A document that describes how risk management activities will be structured and performed.

Risk Matrix, Risk Assessment Matrix, Probability and Impact Matrix

A qualitative risk analysis tool used to visualize a project’s overall risks according to their likelihood o occurrence and their impact on the project.

Risk mitigation, Risk control, Risk reduction

A risk response strategy whereby the project team acts to decrease the probability of occurrence or the impact of a threat.

Risk Mitigation Plan

A document that specifies the deployment plan to mitigate risks identified in the risk register and outlined in the risk assessment matrix.

Risk monitoring

the ongoing tracking and evaluation of identified risks and mitigation efforts.

Risk-neutral

A person or organization that deals with risks objectively; they analyze risks and then make informed decisions.

Risk owner

the individual or entity responsible or the management and control of a specific risk, ensuring that appropriate actions are taken if the risk occurs.

Risk parameters

Risk characteristics such as probability, impact, dormancy, controllability, urgency, detectability, connectivity, strategic impact, proximity, propinquity, manageability, etc.

Risk perception

The way a stakeholder views a risk, based on a set of values or concerns.

Risk proximity

When, or how soon, a risk event is likely to occur.

Risk rating, Risk ranking

using a numeric classification, such as 1 to 5, or a scale e.. low, medium, or high to determine which risk is the most serious and thus which to prioritize.

Risk register

A document or spreadsheet used to catalog project risks and then record the assessment and analysis results. Helps track risks throughout the entire project lie cycle.

Risk report

A document that summarizes the activities related to the assessment, analysis, and management of risks within a project.

Risk response

The planned or actual action in response to a risk event.

Risk review

the process of examining the effectiveness of the risk response strategies.

Risk review meeting, Risk reassessment

A meeting to analyze the status of existing risks and identify new risks.

Risk-seeker, Risk-taker

A person or organization that has a higher tolerance or risks and underestimates their severity, often seeing risks as opportunities.

Risk sharing

A risk response strategy whereby the project team allocates ownership of an opportunity to a third party who is best able to capture the benefit of that opportunity.

Risk threshold

The measure o acceptable variation around an objective that reflects the risk appetite of the organization.

Risk tolerance

The willingness of a person or organization to accept or avoid a risk.

Risk transfer, Risk deflection

A risk response strategy whereby the project team transfers all or part of a risk to a third party, usually by some form of contract.

Secondary risk

the risk that arises as a direct result of implementing a risk response to a specific risk.

Sensitivity analysis

helps determine which risks have the most potential impact on project outcomes.

Threat, Negative risk

a potential event or circumstance that can negatively impact the project if it occurs.

Tornado diagram

a bar chart that visually displays the magnitude of each risk in descending order.

Trier

an indication that a risk is about to occur.

Uncertainty

A lack of understanding and awareness o issues, events, paths to follow, or solutions to pursue.

Unknown unknown, Unidentified risk

A risk that you’re not aware of.

Urgency

The period of time within which a response to the risk should be implemented in order to be effective. A short period indicates high urgency.

Volatility

The possibility or rapid and unpredictable change.

VUCA

Stands or Volatility, Uncertainty, Complexity, and Ambiguity.

What-if analysis

a technique used to explore the potential outcomes of different courses of action.

Workaround, Turnaround

An unplanned response to a negative event or issue.