7 What is the difference between risk and uncertainty?

All risks are uncertain, but not all uncertainties are risks. David explains the difference!
[NOTE: We have recently discovered an audio problem on the first ten videos in this series, including this one, which causes the sound level to vary. We apologise for this problem and the video production team are trying to fix it. We hope it does not spoil your enjoyment of the video content.]

[@budekins542]

"Risk is uncertainty that matters" - excellent observation.

[@Risk-Doctor]

Thanks Bud!

[@bassem808]

Allow me to add small modification. “ Risk is uncertainty that matters and it impacts my objectives “

[@hamenyayohanakasase5836]

I am happy to declare that Dr. David is my role model in risk management. I do try as much as possible to adopt the way you explain the risk management concepts. I hope after several years of my active engagegement in risk management practices, my expertise will increase as much as possible.

[@Risk-Doctor]

Thanks for this positive and encouraging feedback Hamenya. I'm really pleased that you are inspired to develop your skills in managing risk wherever you encounter it, and I'm glad that these videos are helpful to you. I wish you success.

[@kannanv8075]

David is Risk Guru who explains in a simple language. All the best . You are helping us to understand Risk Framework in more matured way.

[@Risk-Doctor]

Thanks for these positive and encouraging comments, I'm glad to be able to help.

[@AntuNeelesh]

RISK is "uncertainty" that matters and affects your "objectives" !! 🤓

[@Risk-Doctor]

That's absolutely right Shekhar! It only matters if it can affect one or more objectives. If it can't affect any of our objectives, then it's an irrelevant uncertainty that doesn't matter!

[@classicaeaestheticae1456]

Q7 was a real game-changer. The link between risk and objectives (not just events). Brilliant.

[@Risk-Doctor]

Thanks Calluna, this is a really important concept. Risk is "uncertainty that matters", and if somethig doesn't affect objectives then it doesn't matter so it isn't a risk!

[@salmanalphatron5813]

Beautifully explained, Thanks for the upload!

[@Risk-Doctor]

Thansks Salman, glad you liked this one.

[@salmanmorris4484]

you make risk management so amazing

[@Risk-Doctor]

Thank you Salman, that's very encouraging to hear.

[@whattheisfor9200]

This absolutely amazing video, im taking risk and uncertainty module at university and this helped so much

[@Risk-Doctor]

Thanks very much for your encouragement. I wish you success with your university course.

[@preetijadhav6030]

I am glad to have landed here!! Great explaination!!

[@Risk-Doctor]

Thanks Preeti. I'm glad you've landed here too!!

[@karunkumar6577]

I thought that after 10 years of being a risk professional , I know it all and can explain to everyone.. ..till I saw this.

[@Risk-Doctor]

@@karunkumar6577 Thanks for this comment Karun. We should all be learning all the time - I know I am. No-one knows it all...!!!

[@1983toka]

This discussion helped me in thinking about the investment decisions I have to make on daily basis. Lack of knowledge is an uncertainty that matters , I mean if I don't know enough about the business I am investing in , then probability of landing in deep trouble will increase.

[@Risk-Doctor]

That's right, understanding the scope of the uncertainty is the first step to managing it. Once you "know what you don't know", you can begin to make better decisions. I'm glad this short video was helpful and enlightening.

[@malickyhussein9032]

Thanks alot Dr. God bless you..

[@user-qf3eh2wy1y]

Is there à book or an article that explain thèse difference ?

[@Risk-Doctor]

Almost all of my books discuss this in the opening chapter, when we talk about what we mean by "risk". See risk-doctor.com/risk-doctor-books/. There is also a one-page Risk Doctor Briefing I wrote 20 years ago(!) on this topic, see here: risk-doctor.com/wp-content/uploads/2020/06/06-When-is-a-risk-not-a-risk-Part-1.pdf I hope this helps.

[@louiabdalla1]

Great.

[@Risk-Doctor]

Thanks Loai!

[@sathyasathya5553]

This video is useful

[@Risk-Doctor]

Thanks Sathya, I'm glad you think so.

[@muskduh]

thanks

[@Risk-Doctor]

You're welcome!

[@harshdeepsingh3627]

Risk hai to Ishq hai...translating into "if there is a risk then there is love." (As per World's best rated Web series SCAM 1992)

[@Risk-Doctor]

That's an interesting perspective!

[@chriskharta7587]

Impressive

[@Risk-Doctor]

Thanks Chris.

[@medardopanlilio4318]

Rain matters if the project is picnic.

[@Risk-Doctor]

You're right of course - but the level of response needs to match the level of rain risk, and the importance of the picnic. How much rain is expected, and when and where? Do you cancel the picnic? Or can you just delay it or move to another spot? Or do you go ahead but take umbreallas and coats? Would your decision be different if this was a farewell picnic to say goodbye to your only daughter before she leaves the country to get married?

[@medardopanlilio4318]

@@Risk-Doctor Yes, that's right. Risk decisions are guided by goals(and the importance we attach to them) and ultimately by cost-benefit analysis. If the costs of trying to save the picnic, which include the option of using umbrellas and coats, outweighs the benefits that one gets from picnic, one is better off canceling the picnic or transfer the risks to another host willing to take the risk and who find more benefits from seeing old pals.

[@macoute100]

😅

[@Risk-Doctor]

Glad you liked this one!

[@swaggboymcgee210]

Pure ideology

[@Risk-Doctor]

I'm not sure whether this is a compliment or not! My dictionary defines ideology as "a system of ideas and ideals, beliefs and principles, which forms the basis of theory and policy." Err, I think that's a good thing, right?

[@majidrajpar]

Rubbish

[@Risk-Doctor]

Hi Majid, sorry that you didn't like this short video.

[@salmanalphatron5813]

Only thing rubbish here is your god damn face!! Why you people are so freaking negative man? If you don't like the video then just move on! at least respect the efforts and time of the uploader for god's sake.

[@karunkumar6577]

Majid..what's so rubbish about it ? You can refer to ISO 31000 or COSO 2017 framework, this is the finest understanding that one can give. About faces, even you don't have looks to die for...