4 Types of Project Risk - Different Forms of Uncertainty

A project risk is simply ‘uncertainty that can affect outcome’.

And when we classify risks, we focus on the types of impact that they can have:
- Schedule
- Budget
- Technology
- People
- Compliance
- Political…
- Etc

We rarely think of the differences in the kinds of uncertainties.

Yet, differences there are. And they are important. The easiest classification is into:

- Known-knowns
Risks we know all about, but their occurrence remains random
Probabilistic risks - aka Aleatory risks

- Known-unknowns
Risks that arise from gaps in our knowledge, which we are aware about
Reducible risks - aka Epistemological risks

- Unknown-unknowns – or ‘unk-unks’
Gaps in our knowledge about which we are wholly ignorant
Fog of ignorance, or 'Black Swans' - aka Ontological risks

For more about Black Swans, see 'What is a Black Swan?' https://youtu.be/C9R0EDyQybs

- Unknown-knowns
Things we do have knowledge of – but that it has been lost or obscured
Hidden knowledge - aka Latent risks
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- Risk Management - 5 Tips to do it right
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