Is it Risk or Uncertainty?

Recently we have been working with a client where there was much debate about the legitimacy of some of the Risks recorded in their risk registers. We recalled a similar challenge when working with another client in the past where I wrote the paper on which this article is based to present the views of those involved in the discussion.

This article seeks to provide guidance on what constitutes ‘Uncertainty’ and what should be included as a ‘Risk’ event. It ultimately seeks to ensure that Uncertainty and Risks are incorporated consistently within estimates and schedules. In the following text, this is achieved through indicating the sorts of challenges that we could adopt to distinguish between legitimate Risks and those items that constitute Uncertainty around planned activities.

I’ve posted this article in the hope of initiating some useful debate about how best to determine the legitimacy of Risks and whether Uncertainty should be recorded in the risk register or if there is a more effective approach for managing them separately. We would be interested to hear your views and approaches that you/ your clients take. If you have no objection, I’d like to incorporate some of the learning from the debate and provide an improved version of this article once a wider understanding of the various viewpoints has been collated.

Distinguishing Uncertainty from Risk events

Where a source of uncertainty has been identified, clarity is required as to whether it is Uncertainty or a Risk event. This can be established by asking the following question: 

“Will the impact of the identified uncertainty lead to additional activities being added to the plan, or would it result in only increasing the durations and costs of existing activities?”

Where Uncertainty represents variability around planned activities, Risks represent alternative unplanned outcomes that could give rise to additional activities, costing more and extending timescales.

If the area of uncertainty will lead to extra activities/ work scope being added to the plan, it could be a valid Risk. If the activity/ work scope does not change but merely costs more or takes longer, it should be considered as Uncertainty.


An item which is a known element of delivering the project is certain to have an impact during its delivery and so this should be part of the base estimate/ plan. When estimating these values, it is often done with incomplete knowledge and so, in order to ensure this is adequately reflected in a model, a range is applied which reflects the level of confidence in this value.

Uncertainty could be defined as

“…the variability in the estimated value (cost or duration) of a planned activity/ known scope…”

Cost Uncertainty ranges should consider variation in estimated quantities and unit rates (e.g. uncertainty in work content, labour rates, outputs, the pricing and quantities of equipment and materials).

Duration Uncertainty ranges conversely should include any factors that could influence the duration of planned activities such as the production rates of planned tasks.

At an early stage where no firm quotes and limited appreciation of how the project will be implemented have been established, there is likely to be a broader uncertainty range than where quotes have been received, design has been progressed and a clear approach has been planned. This is effectively illustrated in the commonly used diagram below:

Figure 1: Illustration of Estimating Uncertainty

Where variability is included within Uncertainty ranges rather than Risk, this does not imply that the uncertainty is trivial or does not require significant and specific control. The management and progress of individual activities can have a major effect on the project outcomes and this activity is central to a Project Manager’s role supported by Project Controls (i.e., through managing Issues, engaging stakeholders and driving efficiencies in the overall delivery of the project). I would be interested in views of whether this should be recorded in the risk register or if there are other ways you have seen this managed effectively.


Risk events represent further costs or timescales to deliver activities that were not originally planned/ anticipated. Risks are subject to quantitative assessments where the probability of occurrence is always assigned a value of less than 100%. This contrasts with anything which is a part of the base scope, having a 100% likelihood of happening.

If an event is incorrectly added as a Risk rather than included in base costs with associated Uncertainty ranges, this is in effect underplaying the Risk exposure since there is 100% chance of this event happening. Clearly it is better that the project sets aside the whole cost that is needed to deal with an event than only the proportion that is included in contingency when weighted by probability.

There are numerous definitions for a Risk but what they all have in common is that they are an uncertain event and they have the potential to impact on the achievement of planned objectives.

APM defines a Risk as:

“…an uncertain event or set of circumstances that, should it occur, will have an effect on achievement of one or more objectives…”

The ISO 31000 definition distils this to the basic essential features:

“effect of uncertainty on objectives”

What this description does miss is distinguishing between an event and uncertainty around planned activity.

A Risk is an uncertain event; if it is something that is within the project’s knowledge (i.e., they know it will happen), then this is known scope. Where a Risk has a very high chance of happening, we are essentially saying it is ‘almost certainly’ going to happen; in this instance it is better incorporating it in the base estimate. Furthermore, where a Risk has already impacted, this no longer represents an uncertain event (it is now an issue) unless there is a chance that the Risk could impact again. If it could happen again, the Risk should be retained on the Risk Register, evaluated to reflect the chance of it re-occurring and controls strengthened by taking lessons from previous experience.

It is important to consider context when establishing whether an area of uncertainty is a legitimate risk; for example, by understanding what has been included in the current base estimate/ plan. If contaminated land is being excavated, then we should have allowed for some variability in the base estimate. Alternatively, if we’ve assumed the land is free-release then a Risk could be that the land is found to be contaminated. Understanding the variables allowed for and not allowed for within the base estimate/ plan determines whether certain considerations might be allowed for as Uncertainty or included as a Risk.

I’ve tried to summarise the key points above in the following flowchart which asks a series of questions to help determine whether an area of uncertainty should be captured as a Risk event.

Figure 3: Is it a risk?

The above challenges can help drive the identification of the true underlying Risk through discussions with the project team. It is important that the challenged risk is not eliminated without a detailed discussion to ensure that it is adequately captured and appropriately factored into any modelling that is to be undertaken. It is possible that the area of uncertainty initially raised is not a legitimate Risk but the discussion that the project team embarks upon to defend their Risk may give rise to the actual Risk event.

The main intent of this article was to canvas opinion on what should be recorded in the risk register and if ‘Uncertainty’ should not be included, is there a pro-active process whereby this key area of uncertainty is effectively managed. Please let me have your comments as I would value your views.

Leave a Reply

Your email address will not be published. Required fields are marked *

You Matter

We listen to your ideas; we listen to your improvements; we listen to your suggestions and then we implement them. We don’t ignore you, downplay you, disregard you or undervalue you. Some examples of successful team lead initiatives is our internationally successful riskologists podcast, and our highly acclaimed riskollective network… and we have more ideas in the pipeline that came right from our team.

If you have dreams, we make them happen.

Our annual strategy trips are also now famous across the profession. We encourage all members of the team to feed into company plans and help shape our collective success.

Industry Package

At optimise, we’re committed to attracting top talent and that’s why we’re proud of the packages we offer our team.

They offer the best balance of financial reward, perks and incentives, bonuses and continuous training and development. We also conduct a yearly review of national inflation rates and the cost of living, and we apply a COLA (Cost of Living Adjustment) to all our employees salaries where applicable.

Please see the matrix below for a comprehensive overview of our package structure:

Profit Shares & Bonuses

At optimise, we believe in recognising and rewarding your hard work. Join us and enjoy not only industry salaries, but opportunities for profit sharing and performance-based bonuses. Our financial success is linked to your personal financial success, so we all benefit as the company grows and expands.

Your bonus is linked to the achievement of tailored objectives that satisfy a business need but also will be something that exploits your interests!

If you’ve ever considered being a business owner now’s your chance, because we have no glass ceiling. If you work hard, one day you could be an owner and director at optimise.


Join our vibrant team where collaboration isn’t just encouraged – it’s celebrated!

From bi-weekly team drinks (on company time), quarterly team events and team lunches to celebrate significant company successes, we foster a tight-knit community that values camaraderie as much as innovation.

Your career here isn’t just about the work; it’s about the connections you’ll make and the supportive environment that propels your forward.

We are a team; we are friends; and we care for one other.

Work where you’re needed

Experience the freedom to work from anywhere with our remote-friendly policies. We empower our team with flexible work arrangements, enabling you to achieve your best wherever you are!

Work remote, hybrid or office based as you and our clients’ needs require, for maximum flexibility in life and mutual benefit.


A healthy work-life balance is a non-negotiable for us at optimise. Our commitment to our employees comes above all else, to ensure we foster a work environment focused on employee wellbeing that contributes to a positive & dynamic company culture.

Although we always work to accommodate our client’s needs, your personal situation will always be considered, and you will not be forced into a commission which does not suit you.

Alternatively, if you wish to spread your wings and travel, our international client base enables us to assist with this!

World Class Clients

We provide opportunities to work on some of the most complex, interesting and impressive projects and programmes on the planet.

You have the chance to build a well-respected reputation for yourself within the national and international discipline of risk management.

Our bread and butter is in the infrastructure sector, with a combined decades of experience in rail, aviation, nuclear, highways, construction, utilities, government oil and gas and defence to name but a few.

A Nurturing Culture

At optimise, we support with more than just your career development, we work with you to attain personal goals and become happy and contented with life, not just work.

We are proud of the mentorship incentive we offer for all our team. Get to know us all and see who you share similar values with, who inspires you and possesses skills you wish to acquire.

We are always at arm’s length. One of the team will always be available to provide coaching support in client deployments to ensure that learning and experience are linked, and an environment is provided for opportunity to practice what’s been learned in a ‘safe space’.

Most importantly, we work hard to ensure our team always maintain an optimal work/life balance and protect reserved time allocated each week in your calendar for professional development.

First Class Training

Our vision statements are ‘develop the next generation of risk professionals’ and ‘Improve the profession for the better’, for a reason!

Optimise is passionate about investing in our people to ensure you are fully prepared to be the best possible risk professional you can be. Our aim is to equip you not just with the necessary skills to do your job, but to understand the nuances of the roles and procedures you will interface with throughout your career.

Every day is a school day – whether you are just starting out, developing or well established in your career, we will continue to invest in your professional development.

Progress at your Pace

We understand that a clear career path is extremely important to provide direction, set and achieve your goals, make informed decisions and stay motivated to truly foster a sense of purpose in your professional journey.

We nurture a culture of progression based on competence attainment, not time served. We believe this unconstrained development allows you to flourish and progress at your pace and we set clear requirements for you to achieve your promotion as soon as you are ready.

We offer exceptional opportunities to become the best in the industry faster than our competitors, and we’re passionate about providing support in accelerating you through different industries and experiences at the pace you need to meet your competence.