What is a Risk in Project Management?

The PMBOK^® Guide describes “Risk” as,

“An uncertain event or condition, that if it occurs, has a positive or negative effect on a project’s objective.”

Under both ISO 31000:2009 and ISO Guide 73, the definition of “risk” is no longer “chance or probability of loss”, but “effect of uncertainty on objectives” thus causing the word “Risk” to refer to positive consequences of uncertainty, as well as negative ones.

Many things are uncertain; risks are by definition only those uncertainties that will impact the project should they occur.

That is why risks need to be identified – planned – evaluated – mitigated. This will be done in the risk management plan (RMP) or sometimes referred to as ROP.