The Difference Between Risk and Uncertainty

Have you ever think what's risk and what's uncertainty? Try to think about that! When you think about that, maybe some of you could not differ them. Risk is a part of uncertainty. But uncertainty isn't part of risk.

"All risks are uncertain, however, not all uncertainties are risks."

There are many definitions about risks, some of them are:

• Risk is the combination of the probability of an uncertain event and its consequences - IRM (Institute of Risk Management). Positive consequence could result a opportunity, meanwhile, negative consequence could come out with threat.
• Risk is an uncertain event or condition that, if it occurs, has an effect on at least one project objective - PMBoK. We never avoid risks, whatever the risks are. There will be always risks for anything. 

What makes us cannot avoid risks?

We cannot avoid risks, but we can minimize them. Risks happen because of we are lack of knowledge, experience, information, and uncertainty what's coming next. Besides that, we have or somehow find requirement, assumption, constraints, or condition that come up with the possibility of negative or positive outcomes.

Type of Risks

Every risk that we found in our life has its own characteristics. We can divide risks into 3 types:

1. Hazard (pure) risks. This kind of risk will give negative impacts to your company / organization.
2. Control (uncertainty) risks. From certain to uncertain.
3. Opportunity (speculative) risks. No worries about this one kind of risk.

Risks could be negative or positive. But, still, there are many risk importance, such as:

• Your organization or company will be more efficient in order to take action on some events that cause disruption.
• Processes will be more effective
• Your company will be well-prepared with many strategies. This is really important! With risks, most companies will carry out their business processes that had been set up with strategies they had planned before.