1 A future root cause yet to occur which if eliminated or corrected would

1 a future root cause yet to occur which if

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1. A future root cause (yet to occur), which, if eliminated or corrected, would prevent a potential consequence from occurring. This is the most basic reason for the presence of a risk. 2. A probability or likelihood assessed at the present time of that future root cause occurring. © Management Concepts. See inside front cover for additional information. 4-1
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3. The consequence or impact (such as a loss, injury, disadvantage, or gain) of that future occurrence. An issue is a problem or consequence that has occurred (or is certain to occur) due to realization of a root cause, and requires a resolution. It is important to distinguish between risks and issues. This is one of the more misunderstood aspects of risk management. Risks involve uncertainty in the future, while issues are in the here and now (or past). If a potential root cause has not yet occurred, and it is not certain that it will occur, it is a risk, and you can identify potential methods to prevent it from occurring, or reduce the probability of it occurring and/or the impact if it does occur. If a root cause has occurred, or if it is certain to occur in the future, it is no longer a risk; it is now an issue. The following examples help illustrate these concepts. An aircraft radar system prime contractor decides to use a commercial circuit card as a component in its new radar. A potential future risk is that the circuit card becomes unavailable during future radar production. A potential future root cause of the unavailability is that the vendor decides at some point in the future to discontinue production of the circuit card. The radar system prime contractor determines through discussions with the circuit card vendor that there is a 30% probability the vendor will discontinue circuit card production prior to the end of the radar system production run. A consequence if this risk occurs is a schedule delay in radar deliveries. Suppose the prime contractor fails to identify the potential risk and associated root cause and fails to develop appropriate mitigation strategies for the root cause. What if the circuit card vendor later notifies the contractor that they will stop producing the card in six months, but the prime contractor is in the middle of a five-year production run of radars? The prime contractor now has an issue (i.e., the root cause has occurred or is certain to occur), and must react to it with only six months to find an alternative strategy. You recently purchased a house in a region with normally warm temperatures. The long-range forecast for your area is now calling for unusually cold temperatures (in the 20s or even teens). You checked the crawl space under your house and noticed that the water pipes there are not insulated, and will not be protected from the forecasted cold spell. You are concerned about the potential risk that the pipes will freeze and burst.
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