‘risk – the effect of uncertainty on objectives’ISO 73, Risk Management Definitions
A risk is something that will have an effect on your objectives, good or bad.
So you might have something that threatens your success (a downside risk) or an opportunity that could help you on your way (an upside risk).
There are lots of ways to break a risk into components but most include a combination of a thing that can happen (a threat or opportunity), how likely that thing is (the likelihood) and what its effect might be (the impact).
Often, we write express risk as a formula which will help us assess and grade our risks quantitatively. So we can take what we just wrote to produce this:
Risk = likelihood (of the thing) x impact
You can build much more complicated structures, definitions and models but this is all you need to get started.
As I promised, keeping it simple….
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