In project management, risk management is the practice of identifying, evaluating, and preventing or mitigating risks to a project that have the potential to impact the desired outcomes. Project managers are typically responsible for overseeing the risk management process throughout the duration of a given project.

To effectively manage risk, organization must have a clear understanding of their objectives so they can identify any possible barriers that could impact the team’s ability to produce results.

“Risk management is really about looking at your project objectives and figuring out what the threats to those objectives are, and what you can do to address them from the beginning.

The types of events or scenarios that fall under the category of risk can be broad and sometimes misinterpreted. While project managers or those tasked with overseeing a project may be inclined to view risks exclusively as threats, this is not always the case.

To clarify this common misconception, Emerson defines project risk as “…a future event that may or may not happen which, if it does happen, will have some impact on the objectives of the project. It could be positive—an opportunity, or negative—a threat.”