A clear breakdown of inherent risk vs residual risk (and why you need to know)
If you want to run successful projects, you need to have a strong understanding of risk. There is no getting around it.
There are different types of risks, and one way to categorize them is to identify them as inherent risks or residual risks. But what does that really mean?
Let’s talk about it:
Inherent Risk
“Inherent risk” refers to risk that you start off with before even beginning your project. It’s there from the very beginning.
If you do nothing to mitigate that risk, it remains an inherent risk that will carry throughout your project.
Residual Risk
When you have an inherent risk, you’ll come up with a risk mitigation plan.
But sometimes, even though you have a mitigation plan, there is still some risk present because not everything can always be addressed. This is known as residual risk.
Inherent Risk vs. Residual Risk example
If you think an example would be helpful to really understand the difference between inherent risk vs. residual risk, head on over to YouTube with me and we’ll finish this conversation there. I have an example to share with you!
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Adriana Girdler, PMP | Creator of Slay Project Management™
