Unknown Risk

Unknown Risk

Unknown Risk Jonathan Poland

An unknown risk is a potential loss that is not recognized or identified. In the context of risk management, unknown risks are those that have not been identified and managed as part of the risk management process. These risks may be difficult to predict or anticipate, and can have significant impacts on an organization if they occur.

Unknown risks can be particularly challenging for risk management, as they are not accounted for in risk assessments or management strategies. This can make it difficult for organizations to prepare for or respond to these risks effectively. To address unknown risks, it is important for organizations to have robust risk management processes in place to identify and assess potential risks, as well as to have contingency plans in place to mitigate their impacts.

Unknown Unknowns

An unknown unknown is the state of being unaware that a particular type of knowledge exists. For example, an investor who is unaware of the concept of liquidity may purchase the stock of a firm with a high debt load, negative cash flow from operations, rising cost of capital and other issues that make bankruptcy possible. Such an investor is exposed to a firm’s liquidity risk without knowing that such a concept exists.

Black Swans

Black swans are a class of high impact, low probability events that are difficult to predict. In some cases, low probability risks are excluded from risk management because they seem so improbable. However, events that are high impact may be a significant risk even if their probability is extremely low.

Risk Identification Shortfall

Risks may simply be missed by the process of risk identification. For this reason it is common to involve all stakeholders in risk identification and to bring in subject matter experts as required. For example, an information security expert may be required to identify risks to an information technology project.

Learn More
Customer Need Examples Jonathan Poland

Customer Need Examples

Customer needs refer to the specific desires or requirements that a customer has for a product or service. These needs…

Behavioral Targeting Jonathan Poland

Behavioral Targeting

Behavioral targeting is a form of online advertising that uses information about a user’s online activities to create targeted advertisements.…

Algorithms Jonathan Poland


An algorithm is a set of instructions or rules that are followed to solve a problem or accomplish a task.…

Sales Skills Jonathan Poland

Sales Skills

Sales skills are the abilities, knowledge, and personal characteristics that enable an individual to succeed in a sales role. These…

Capitalism Jonathan Poland


Capitalism is an economic system based on the principles of economic freedom, private ownership, and the creation of wealth through…

Economic Efficiency Jonathan Poland

Economic Efficiency

Economic efficiency refers to the ability of an economy to produce the maximum possible value using its available resources, such…

Project Goals Jonathan Poland

Project Goals

Project goals refer to the desired business outcomes that a project aims to achieve. These goals are typically outlined in…

Problem Management Jonathan Poland

Problem Management

Problem management is an important aspect of IT service management that involves identifying, analyzing, and resolving problems that can impact…

Is Greed Good? Jonathan Poland

Is Greed Good?

Greed is good is a paraphrased quote that originates with the 1987 film Wall Street. It is important to note…

Content Database

Search over 1,000 posts on topics across
business, finance, and capital markets.

Knowledge Work Jonathan Poland

Knowledge Work

Knowledge work refers to work that involves the creation, use, or application of knowledge and expertise. It is characterized by…

Commercialization Jonathan Poland


Commercialization is the process of introducing a new product or service into the market and making it available for purchase…

The Power of Compound Interest Jonathan Poland

The Power of Compound Interest

Traditional finance will explain compound interest as the interest paid on a loan or deposit calculated based on both the…

What is Air Gap? Jonathan Poland

What is Air Gap?

An air gap is a computer network that is physically isolated from other networks, including the internet. This isolation is…

Channel Management Jonathan Poland

Channel Management

Channel management refers to the process of coordinating and optimizing the distribution channels that a company uses to bring its…

Toxic Positivity Jonathan Poland

Toxic Positivity

Top-down and bottom-up are opposing approaches to thinking, analysis, design, decision-making, strategy, management, and communication. The top-down approach begins with…

Inferior Good Jonathan Poland

Inferior Good

An inferior good is a type of consumer good for which the demand decreases as the consumer’s income increases. In…

Research Skills Jonathan Poland

Research Skills

Research skills are abilities that enable individuals to effectively investigate, analyze, and communicate knowledge. These skills are essential for success…

Legal Risk Jonathan Poland

Legal Risk

Legal risk is the risk of financial loss or other negative consequences that may arise from legal action or non-compliance…