Risk: Entrepreneur vs Project Manager

Understanding and managing risk in our quickly evolving society is an important skill for individuals in a variety of professions, for example in the stock market, we might look to develop a portfolio with an overall zero correlation between all the investments within, as a way to lower risk. Entrepreneurs and project managers tend to view and manage risk with some similar and different aspects.

Both professions start with the similar perspective that risk can be divided into a number of categories such as foreseeable or not, controllable or not. Risk can be viewed as stemming from the assumptions, inherent or explicit in their plans.  In their business plan, entrepreneurs make assumptions about obtainable market share, competitor actions, customer adoption rates, etc. Project managers make assumptions around schedule, cost, stakeholder needs, etc., for example, that a task will take 10 days to complete.  Both professions then develop plans to deal with risk.

The difference tends to come from the management or use of risks.

A start-up is a risk endeavour.  For entrepreneurs the start-up itself is an attempt to turn assumptions into facts and while attempting to control risk, entrepreneurs are purposively navigating a risk environment to develop a viable company, without risk the company is not an entrepreneurial venture. Indeed, breakthroughs can happen from taking risk and managing it well.

For project managers, risk is to be migrated, reduced or transferred, in other words, the desired approach is a risk free one.

In both professions, risk events happen to disrupt the plan and the ability to detect the risk is going to occur or has, responding to the risk event and adjusting the plan, are skills to be learned.  Such skills can be learned through experience and also by the application of methodologies or frameworks, this approach of learning is something we are implementing in our entrepreneurship and project management simulations see http://www.experientialsimulations.com

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