Risk management is defined as the systematic process of identifying, analyzing, and responding to project risks (PMI, 2008, p. 127). Risks and uncertainties are at times extremely hard to detect or identify during the course of a project and may inflict non-repairable damage to the end products. There is absolutely zero doubt that events for instance natural catastrophes can be anticipated with ease, but the impacts are pretty arduous to estimate due to knock-on effects (Ogaard, 2009). Several reasons serve as consistent barriers in possibility to identify the risks such as the risks being dependent on response, time and progress or instinctively unknown.
Seong Dae Kim, in his paper, Characterizing Unknown Unknowns, writes that few unidentified occasions or risks are not recognized due to zero knowledge or information (Stoelsnesa, 2007). The most expensive natural catastrophe, Hurricane Katrina hit the United States in 2005 (Knabb, Rhome, & Brown, 2005) and it occurred due to unidentified risks.
Two prime success factors for the risk identification include good communication and receptive risk assessment team. The organizations often fail to identify the potential risks due to poor communication. One may way, communication has an overlapping impact on risk management is how proper the risk is penned down. In his article on risk management, Cindy Margules gives an example of an amateur written risk, as Bad weather delays the plane. Then the author gives an example of a well-written risk, If bad weather delays the plane, then it will impact the arrival time by one day and we may lose one day of scheduled tours on our vacation.
During risk assessment, highly skilled professionals could really make a difference in terms of identifying the risk. However, if the team is non-receptive, risks could get detrimental for the project under progress and this could be the outcome of being ignorant the finest methodologies.
