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01 June 2014

Differences between Risks and Issues, Part 2

Differences between Risks and Issues, Part 2

Threats; and Another Side of Risk

 
Part 1 (click here) of this series defined issue.

Threat versus Risk

If a situation, such as a cause and its effect, is certain, then it is an issue. With risk, we deal with uncertainty. If the probability of something is zero, it has no uncertainty. If the probability is 100%, again, it has no uncertainty. The term Risk only applies when

0% < probability < 100%

In Risk Management, we avoid the term "threat" because in everyday discussion, "threat" could also mean "promise of harm" or "logical sequence resulting in harm."

For example, a bully "threatens" to call you a bad name. If we believe the bully, this type of threat would be an issue, not a risk, because there is no uncertainty. If we don't care what the bully says, there is no effect, so it is neither a risk nor an issue.

Another side of risk

Most explanations of risk concentrate on the probability of the event. What if the event is certain, but you don't know what the effects will be?

Risk has two real parts:
  • Cause - A condition or possible change in conditions
  • Result - The effect that may happen
Risk has a probabilistic part, too:
  • Uncertainty
PMP study materials usually focus on uncertainty about whether the cause will happen. However, we can also have uncertainty about what effect a condition or change in conditions may cause.

Therefore, a condition (or change) may be certain, but you still have risk if you have uncertainty about the results.

As PMs, we are communicators. We listen. Others often use terms and definitions different from ours. So we ask people what they mean and negotiate a common vocabulary. We do this to control the risk of broken communications.

If we find that somebody says "the bully is a threat" and means "the bully poses a risk," then we could enter this in the Risk Log in one of three ways:
  • There is x% chance that the bully will call another worker a bad name, causing that worker to quit.
  • The bully will call another worker a bad name, and there is y% chance that the other worker will quit.
  • There is x% chance that the bully will call another worker a bad name and y% chance that the other worker will quit.
If there is 100% probability that the bully has or will call the coworker a bad name and a 100% probability that the coworker will or has quit, then we have an issue.

And if you go around calling my coworkers bad names, we have an issue.

Further study: Use a search engine to learn more about "aleatory variability" and "epistemic uncertainty." However, please don't ask me about them because, the way other authors explain them, I do not understand at all.

(c) Copyright 2014, Richard Wheeler

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