Risk is More Than Uncertain Future Events

Dr David Hillson FIRM, HonFAPM, PMI Fellow


We all know that risk management is supposed to manage risks. But people often understand very different things when they use the word “risk”. One way to solve this problem would be to insist that everyone uses the definitions found in risk standards and guidelines. These definitions have usually been produced by groups of experts who work hard to be clear, to say what they mean and to mean what they say. Unfortunately most people ignore official definitions when they manage risk in practice. Instead they rely on their own ideas about risk which are often limited or misleading. This in turn can reduce the effectiveness of the risk process and stop it delivering the full range of potential value.

One common misconception about risk is that it refers only to uncertain events that might occur in the future, and which would affect the achievement of objectives if they did occur.

The limitation has partly arisen from the use by some of the term “risk event” as shorthand for all types of risk, leading many (most?) risk practitioners to think only of uncertain future events when they identify risks in their projects or business. Of course risk does include uncertain future events (we might call this stochastic uncertainty), but the risk process must also address other kinds of risk. What are they?

Starting with the idea that risk is “uncertainty that matters”, we can ask what uncertainties might matter. There are several types in addition to uncertain future events. Using alternative words to describe different types of uncertainty can help us to find them.

We should consider three main non-event types of uncertainty as part of our risk process:


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About the Author

Dr. David Hillson


Dr David Hillson CMgr FRSA FIRM FCMI HonFAPM PMI-Fellow is The Risk Doctor (www.risk-doctor.com).  As an international risk consultant, David is recognised as a leading thinker and expert practitioner in risk management. He consults, writes and speaks widely on the topic and he has made several innovative contributions to the field. David’s motto is “Understand profoundly so you can explain simply”, ensuring that his work represents both sound thinking and practical application.

David Hillson has over 25 years’ experience in risk consulting and he has worked in more than 40 countries, providing support to clients in every major industry sector, including construction, mining, telecommunications, pharmaceutical, financial services, transport, fast-moving consumer goods, energy, IT, defence and government. David’s input includes strategic direction to organisations facing major risk challenges, as well as tactical advice on achieving value and competitive advantage from effectively managing risk.

David’s contributions to the risk discipline over many years have been recognised by a range of awards, including “Risk Personality of the Year” in 2010-11. He received both the PMI Fellow award and the PMI Distinguished Contribution Award from the Project Management Institute (PMI®) for his work in developing risk management. He is also an Honorary Fellow of the UK Association for Project Management (APM), where he has actively led risk developments for nearly 20 years.  David Hillson is an active Fellow of the Institute of Risk Management (IRM), and he was elected a Fellow of the Royal Society of Arts (RSA) to contribute to its Risk Commission. He is also a Chartered Fellow of the Chartered Management Institute (CMI) and a Member of the Institute of Directors (IOD).

Dr Hillson can be contacted at [email protected].