Sit at any Risk Management 101 class or Risk Management introductory workshop and you will most certainly be introduced to the risk register. And in that risk register, you will be introduced to two columns: the Risk, and the Impact.
You will be told that the Risk is an event that may or may not happen. You will also be told that Impact is what will happen if the Risk occurs (or ‘eventuates’). Sounds clear, simple, direct.
Now let’s apply what we’ve learned. You are concerned (rightly) about crashing your car. Is that a risk? Or is it an impact? (Avoiding the pun on crash and impact). It is not certain that your car will crash, so that is a risk. What will be the impact? Easy: you may experience fatality. Or you may experience serious injury, or you may experience light injury.
But why isn’t crashing the car an Impact?
What caused the car crash? Did your brakes malfunction? Was that a risk? Was there a risk that your brakes would malfunction? Were you hit by a drunken driver? Was that a risk you faced when you were driving? Absolutely.
So let’s say: Risk = Possibility of being hit by a drunker driver. What is the impact? Crashing your car. What was the risk earlier is now the impact.
The distinction between risk and impact is not so clear. What is a risk from one perspective is an impact from another. But which perspective is the right one to take? And which perspective should you be taking when you fill in the risk register? Do you put “Car crash” under Risk or under Impact?
