Risk is the possibility of not achieving a targeted result, suffering loss or damage within a certain time interval. It refers to potential problems, threats and dangers that may occur in the future. Risk is usually unknown or unpredictable (uncertainty) and varies over time. It has negative effects on the result. There is a risk factor behind every work, but it is a reality that needs to be lived with and managed.

Risk is evaluated with two basic components: the probability of occurrence and the consequences. On the other hand, risk does not always include negative deviations from targets, but also positive deviations. This is why risk is considered together with opportunity in some cultures and philosophical approaches. However, a systematic approach and planned behavior are required to turn it into an opportunity. Risks are addressed in the areas of technical/performance, cost and schedule, which interact with each other.

Technical risk is the measure of not achieving the targeted or desired performance value. Cost risk is the risk of exceeding the estimated and planned cost value. Schedule risk is a measure of the inability to perform a job in the estimated and planned time.

Technical risks are the primary cause of cost and schedule risks. They arise from weaknesses in technological capability, insufficiencies in product realization processes, etc. However, technological innovation capability alone is not sufficient for the success of firms. Innovative ideas need to be introduced to the market as an innovative product, earlier than competitors, at the most affordable price and with high quality. This requires effective and efficient management of product realization processes, while giving importance to R&D and engineering activities.