Tools: Risk Matrix

A risk matrix is another of those tools in my toolbox that I’ll pull out on occasion to help my stakeholders determine the relative severity of project risks, and from there, the risk management strategy we want to pursue.

What is a risk matrix? Take it away, wikipedia:

Risk Matrix is used in the Risk Assessment process; it allows the severity of the risk of an event occurring to be determined.

risk is the total of each of the hazards that contribute to it. The risk of any particular hazard, H, can be defined as its probability, p, multiplied by its consequence, c. In layman’s terms: how likely it is to happen and how bad it would be if it happened.

Although there are complex mathematical formulas to derive risk severity and all kinds of risk matrix formats, I really like a simple one (see below) just to use as a visual, because it makes it much easier for me to explain of how severity and probability combine to make a risk more or less serious than if I tried to explain it with words alone.

It’s a simple tool, and you won’t always need it, but if you think you might be able to put it to use, or would like to tweak to suit your needs, I’ve posted copies of the one above in Excel and Google Docs formats. Let me know if this comes in handy for you!

About the Author

Jonathan Babcock is a management and IT consultant with expertise in business analysis, process optimization and solution delivery methodology. Practical Analyst is his outlet for sharing what he’s learned, and for interacting with solution delivery professionals across the globe.

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6 Comments

    1. Well, technically not a fact until it has occurred. 🙂 We humans are well known for being less than accurate with regard to things we think are “certain”.

      I guess the point with the “certain” ones is that we have time to mitigate or take action to minimize the impact of the ones we are sure are going to occur.

      Thanks for chiming in, Michal!

  1. I love this matrix! Clear, simple, and useable. I have been using a model similar to this for a while but I like the graphical nature of this, I just might have to borrow that 🙂

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