Often in project management of more specifically I should say that in risk management it is common practice to use the term Risk interchangeably with Uncertainty. Though, there is a difference between the definition of Risk and Uncertainty; however, very often ignored by many professionals.
Therefore, today in this blog post I will try to distinguish Risk from the Uncertainty.
Risk: As per PMI “Risk is an uncertain event or condition that, if occurs, has an effect on at least one project objective.” Risk impact may be positive or negative and more importantly it can be measured, or more appropriately I should say – It can be guessed.
You can refer my previous blog about Type of Risks and Risk Related Terms to know more about Risks. Here, I will discuss about uncertainty in more depth.
Uncertainty: Uncertainty is a lack of complete certainty. In uncertainty outcome of any event is completely unknown and cannot be measured, or guessed.
Got it, or not yet clear…. OK, let me make it more clear for you:
Let us say that there are two well-known football teams consist of renowned players, and they are going to play football match next day. Can you tell me exactly which team is going to win? Obviously not; however, you can make an educated guess by reviewing and analyzing the past performance of each individual player and the team. Here you can come up with some number like, there is 40% chance of winning of Team A or Team B; or there is a possibility of losing match by Team A or Team B by 70%.
Now, let us put the same football match in different scenario–
Let us say again that two football teams are going to play a game, and no team player is selected for either teams. In this situation if somebody asks you that which team is going to win? What would you reply? You’re completely clueless about everything, you don’t know which team consist of which player, and how will the teams perform, etc. In this situation you are totally clueless and hence cannot predict the outcome of the event. This situation is called uncertainty.
I hope that now picture about the risk and uncertainty is clear to you.