What is Risk Analysis?
A very useful technique at the beginning of any major project or programme is to perform a Risk Analysis (or Risk Mapping) to try to identify any potential risk which might adversely impact the programme.
Risk Analysis Mapping involves constructing a simple 3x3 matrix for each potential risk identified showing:
- Likelihood of this Risk occurring (high, medium or low)
- Impact of this Risk on your programme (high, medium or low)
Those risks in the top right hand side of the diagram are your top priority risks – medium/high impact and medium/high likelihood.
The next dimension of the diagram is what you intend to do to mitigate your top risks – you have 3 options:
- Do nothing – this is the default - you might select this for your low priority risks
- Reduce Likelihood – you might select this if you think you could exercise control over whether a risk happens or not
- Reduce Impact – you might select this if you cannot influence whether a risk happens so you can only try to develop some resilience to it so that its impact will be lessened if it does occur
For more on Risk Management see: A Systematic Guide to Project Management.
OR if you need help using this tool please contact us.