Non-event & event risks

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Posts: 34
Joined: Sat Jun 15, 2019 3:09 am

Non-event & event risks

Thu Sep 12, 2019 2:19 pm

Please explain the definition of non-event & event risk . I would also like to know the differences between them .
In addition , the unexpected whether changes & unexpected team or material resource unavailability comes under the ambiguity risk?
Posts: 2866
Joined: Sat Jan 04, 2014 3:55 pm

Re: Non-event & event risks

Sun Oct 06, 2019 10:51 am

This is relatively new concept moving away from tradition risk management approach and mindset.
Traditional approach has always been to see risk mostly negatively and an uncertain event
However the project should also be able to manage and to some extent plan for non event bases risks
Non event based risks are basically subtle risks which can be either due to set of conditions which are certain to happen (but the extent of its impact is not known) or ambiguity or disruption that may happen which is not known at all.
It is very difficult to plan for non event based risks, and Project has to have the level of resilience, nimbleness and agility built in to adapt to such risks

3 different category of non event based risk (PMBOK 6 mentioned only two)

1. Variablilty risk also called “aleatoric uncertainty, the term is taken from Greek term 'Alea' which iis game of dice - When u throw dice you are certain to have a number, you just do not know which number.
So for example in a long duration project, you are certain to have currency fluctuation ( this is not an uncertain event) but you do not know which way the currency fluctuation will go and what will be the range.
The best way to handle variation is to simulate the fluctuation rate using monte carlo analysis and have your risk plan for each level of fluctuation (positive or negative)
2. Ambiguity risk also known as epistemic uncertainty, derived from greek word Episteme which means knowledge. The ambiguity risk is basically resulting out of lack of knowledge, since they describe uncertainties arising from lack of knowledge or understanding.
An example could be rolling out Agile methodology in the project, We know for sure that there will be some challenges due to lack of knowledge about agile in the organization (even though you have trained all your staff, we know that not everyone will be able to adapt at same level) , best way to handle ambihguity risk is to take small steps, do trial and experimentation, identify the Gaps and decide a plan of action to bridge the Gap using training or sourcing experts
3. Emergent risks or ontological uncertainty or Black Swans or Disruptions - These are risks which we are unable to see because they are outside our experience or mind set, so we don’t know that we should be looking for them. These risks are difficult to manage and plan for as we do not know when it will occur and when it occurs what is the magnitude of its impact on our project.
Its difficult to provide an example of such kind of risks, however I can say that say for example S and N korea gets unified, we find a life on other planet, etc

Hope this helps
Manish P
PMP, PMI - ACP, SAFe Agilist ... ification/

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