Risk vs Uncertainty

As a Project Manager there is always some risk and uncertainty in the Project. During project planning, Project manager has to take it into account so better contingency plan can be made. While estimating the project, risk is the big factor to take into consideration.

Risk and uncertainty both are future events, both have unknown outcome but the probability distribution is known for risk while unknown for uncertainty.

If we think about dice then before throw we don’t know about its outcome but at least we have a choice that it should be between 1 to 6 only.

One very known quote for this:

“There are known knowns; there are things we know that we know. There are known unknowns; that is to say, there are things that we now know we don’t know. But there are also unknown unknowns – there are things we do not know we don’t know.

                                               

                                         --- United States Secretary of Defence, Donald Rumsfeld

Project Manager has always difficult situation to estimate the risk, cost for plan and control the risk. There is always uncertainty with any risk, if the risk has no uncertainty then it’s not a risk. If the risk is known at initial level then it can be planned before. I think as much as more uncertainty with risk then less we know about its impact.