I can’t seem to get most explanations from the internet and people seem to use the term in numerous ways.
Update: Ok I think I get it. People conflate the hazard and risk concept together. So when people discuss risks they are actually discussing probable hazards.
The reason this confused me is because entrepreneurs will ask about what risks there are in a project. When they just use it as a shorthand meaning what could go wrong that’s out of their control.
What also makes it confusing is that risk analysis calls the hazard column a risk column, then proceeds to add columns of impact and likelihood. When the risk should be the column that is a multiplication oh the impact and likelihood wrt the hazard.
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In the engineering space, risk is the product of the likelihood and consequence of an event.
Something with a low likelihood but massive consequence is deemed high risk, as an example:
The steel rope of an elevator braking has a high consequence – mass casualty, major downtime in that building and probably will lead to many lawsuits.
But at the same time, it has a low likelihood because of design criteria, manufacturing checks and balances, installation practices and maintainenance practices – these are known as controls – this means the risk of an elevator rope braking is considered low, but take any of these controls out, especially the maintenance one, and the risk increases.
We use semi-standardised risk assessments with matrices to determine which events have high risk and should have additional controls put in place – this can be a simple quality assurance step or scheduled replacement of major components.
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