From the course: Strategic Project Risk Management
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Risk debt: The good, the bad, and the ugly
From the course: Strategic Project Risk Management
Risk debt: The good, the bad, and the ugly
- Debt, can't live with it, can't live without it. Anyone that has a mortgage or credit card bill doesn't like paying it every month, but without a mortgage or credit card, we can't afford the lifestyle we are leading. In some sense, project risk is like debt. I call it the risk debt. You need to accept certain risks to make the project viable. And if you take on too much of it, you may lose your shot at the end. Just like financial debt, if you pay for the risks early on to fix them, it costs you less. But instead, if you put it off, it'll cost you more. The longer you put it off, the more it'll cost. Tricky balancing act. One is the right time to pay the risk debt. In the pre-project initiation phase or the planning phase, the execution phase, or during the post-project phase after the project is completed? That brings me to the good, the bad, and the ugly story of risk debt. Starting with the good. Steve Jobs, the co-founder and former chief executive of Apple spent $50 million…
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