Risk Acceptance, Not Risk Ignorance

Andy Jordan is President of Roffensian Consulting S.A., a Roatan, Honduras-based management consulting firm with a comprehensive project management practice. Andy always appreciates feedback and discussion on the issues raised in his articles and can be reached at [email protected]. Andy's new book Risk Management for Project Driven Organizations is now available.

  New Practitioners   Risk Management  

I recently heard a project management instructor talking to his students about risk. It was an introductory class, and the instructor asked the group to identify the four management techniques for risks. The question itself was flawed—he wanted to know the management techniques for threats, which are different (though overlapping) from the techniques for opportunities. Both threats and opportunities are risks.

But put that aside for another article; the real issue I want to address here is that the answer he accepted from the group as accurate was: mitigate, transfer, eliminate and ignore. To make matters worse, he then said to the class that they might see “ignore” referred to as “accept,” but that they shouldn’t worry because it was the same thing.

Wait…what?! No, it’s not. Ignoring a risk is not even close to the same thing as accepting a risk. And while risk acceptance is a perfectly valid response, ignoring it is not. But if that’s what this instructor was communicating, then I suspect it’s a common misconception. So, let’s try to set the record straight.

Why might a risk be accepted?
There are several reasons why a risk might be accepted (and acceptance is a management approach for opportunities and threats). Focusing on threats (as that’s the more common application of risk management), it…

Please log in or sign up below to read the rest of the article.