Risk Management: Using Risk Metalanguage

[#1]

Managing risks effectively is essential for successful project outcomes. However, the terminology used when discussing risks can often be misleading. Project managers can become entangled in overlapping definitions and semantics. Specifically, there's a notable challenge in distinguishing between the causes of risks, the risks themselves, and the possible outcomes or effects.

1. Causes: Simply put, these are the precursors to risk. They represent definite real-world events that introduce uncertainty into a project. For example, incorporating a new software tool into a project's workflow might cause a risk, but it is not the risk itself. 
2. Risks: These represent the uncertainties that arise from the causes. For something to be a risk, it must be genuinely unclear whether it will happen. Using the previous example, the programming team's unfamiliarity with the new software tool could mean they take longer than expected to complete their work; that is, there is a risk that the new tool will lower programmer productivity.
3. Effects: If risks materialize, effects are the consequences that follow. If, for instance, the new software tool lowers productivity, the effect might be that the project misses its deadline. While they provide insight and are especially important when analysing risk impact, the effect must be distinguished from the risk itself.

When causes, risks, and effects become indistinct, project managers run the risk of sidelining genuine threats. Clear definitions and distinctions are needed to ensure you allocate scarce resources most effectively.

To address this situation, David Hillson devised a risk metalanguage. This is a straightforward, three-part risk statement designed to avoid any overlap between causes, risks, and effects. The format is:  

"As a result of <definite cause>, <uncertain event> may occur, which would lead to <effect on objective(s)>." 

We can express our example in risk metalanguage like this: "As a result of the new software tool, lower programmer productivity may occur, which would lead to missing the project deadline." 

Risk metalanguage isn't just an academic exercise. It ensures that risks are identified and distinguished clearly from their causes and potential effects. This clarity is foundational. Without it, the risk management process can quickly become a quagmire, steeped in confusion and misdirection. To prevent project pitfalls, the use of risk metalanguage is highly encouraged.

Risk Register by ProjectBalm

Professional risk management requires an appropriate tool. This is one reason we created Risk Register by ProjectBalm.

Our goal was to automate best practice risk management techniques, and do so via an elegant, usable interface that works with you, and not against you. Risk Register will help you to identify, analyse, treat and monitor risks more easily and effectively than ever before.

If you are experienced at risk management, you will find in Risk Register a tool that works the way you want it to work. If you are new to risk management, our documentation and videos will take you through the whole risk management process, giving lots of useful examples.

Risk Register is fully compatible with risk management standards such as ISO 31000, and can also be used for governance, risk, and compliance (GRC) programs such as Sarbanes-Oxley and PCI. And, of course, Risk Register allows you to easily distinguish between opportunities and threats.

Over the last few years, we've grown to become the most popular risk management solution in the Jira marketplace and we are now an Atlassian Platinum Partner. Why not try out Risk Register by ProjectBalm for yourself?