Many projects fail because they failed to identify the risks involve in their projects. Often times, these project do not even know what hit them and why their project failed. Identifying these probable problems is one of the many tasks of a project manager. Project risks are events, entities, or any force that might cause your project to have delays or lose capability to function normally. Some of the most obvious risks are on the human resources like team members getting sick and could not work for several days or as simple as employee resignations. Another common risk is the delayed delivery of equipments that your project will need to be able to progress properly. Simply put, risks are "problems" for your project that are likely to occur.
There are typically 4 types of "problems": the known known, the known unknown, unknown known, and the unknown unknown. Pretty confusing terminologies, huh?
To expound further, the first type of problem which I coined inconveniently as known known, are the problems that we know and expect to happen. One example for this is say, we know that Matthew, one of the star players of the project, will be moved out of the project by the end of December which is also at the middle of development phase of the project.
Known unknown on the other hand, is a type of problem that we are aware of but for some reason could not identify it. Have you ever had a feeling that something's going wrong but could not think of anything that might prove it exists? Well that's it.
Unknown known are problems that we know can occur but there is uncertainty that it will happen. One example would be natural calamities. Team members getting sick also fall under this.
The last, unknown unknown, is the nastiest among the bunch. These are problems that you don't have a clue about. It just happens right in your face.
Known known problems are not risks, but the rest are. So to further strengthen the definition of risk: risks are problems that has a likelihood to happen and can make your project lose its capability to function normally. Problems that we are sure will happen and the exact time it will occur are not risks since it does not have any likelihood of occurring. Problems like these are usually integrated in the schedule already and would not need any risk management.
2 comments:
Have you experience a Known unknown? Hope you can provide an example.
Actually this is a hard one. One example I can think of is having a new third party vendor in your project. The vendor, having not worked with it in the past, you will have uncertaintees on the quality of its deliverables. The problem causing the poor quality output might be poor communication, ability of the vendor to stick to the agreement, delivery time, or it can be anything. But having experienced working with new vendors in the past, you know you will encounter problems somewhere along the line. You just don't know what the problem will be and when it will transpire.
By the way I based this blog entry on a lecture that I have attended at AIM. ^^.
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