TABLE OF CONTENTS Life looks just a little more mathematical and regular than it is; its exactitude is obvious, but its inexactitude is hidden; its wildness lies in wait.
G. K. Chesterton [1.]
When our world was created, nobody remembered to include certainty.
Peter Bernstein [2.]
Every project is risky, meaning there is a chance things won t turn out exactly as planned. Project outcomes are determined by many things, some that are unpredictable and over which project managers have little control. Risk level is associated with the certainty level about technical, schedule, and cost outcomes. High-certainty outcomes have low risk; low-certainty outcomes have high risk. Certainty derives from knowledge and experience gained in prior projects, as well as from management s ability to control project outcomes and respond to emerging problems. [3.] This chapter discusses how sources of risk in projects are identified, how risks are assessed or measured in terms of likelihood, impact, and consequences, and appropriate ways of dealing with risks.
[1.] Quoted in Peter Bernstein, Against the Gods: TheRemarkable Story of Risk (New York: John Wiley & Sons, 1996): 331.
[2.] Ibid., 207 208.
[3.] Asked once to define certainty, John Von Neumann,the principle theorist of game theory andmathematical models of uncertainty, answeredwith an example: To design a house so it is certain the living room floor never gives way, calculate the weight of a grand piano with six menhuddling over it to sing. Then triple theweight. That will guarantee certainty! Source: Bernstein, Against the Gods
