How do you measure risk event impact on project objectives?

Risk management is like preparing for a school picnic. Using a risk impact matrix, we forecast potential issues (like rain or allergies), rank them by likelihood and impact, and plan accordingly. It's about understanding potential effects on all involved, not just ticking boxes. Visual aids can help communicate risks and responses effectively to the team. Like checking the weather, this is a continual process to ensure the picnic thrives, rain or shine.

I would use 3 colours to help indicate the levels or urgency of the identified risks. Red will be for those risks with high severity indicating urgency for management or eradication ,where possible, of such risk. Yellow will be for those risks on the border line which should be watched closely to prevent them from moving to the red color zone. Green will be for those risks with low impact .

Risk impact is a measure of possible positive or negative outcome of a task, project or programme due to a risk event. So, risk impact should be calculated or determined with the help of subject matter experts (SMEs) based on their experience. Once the inputs are received from SMEs, risk impact based on severity can be scored on a scale of 1 to 5 or 1 to 10 depending on the suitability to project. Same way likelihood scoring shall be done. Once both are done then mitigation shall be planned by consulting with respective stakeholders.

We love boating. In our family boat trips, we always use the Risk Impact Matrix. By: 1) Identifying Priorities: Pinpoint which risks require our attention. Like, a sudden illness affecting multiple members would be an emergency, demanding prompt medical care, 2) Resource Allocation: Efficiently focus our time and resources, organized by dividing into Important, Urgent, and Immediate, 3) Decision Making: When a risk arises, we already have a visual aid to guide us by severity and the appropriate response, 4) Preventive Measures: We can address the issue before it escalates into a major problem, and 5) Communication: Sharing the Risk Impact Matrix with our trip companion fosters open communication and ensures that we are on the same page.

With the help of experiences and surveys of the personnel working in that job, as well as examining the problems that have been observed in those jobs. In the field of HSE, we consider the best methods for risk management, such as encouraging, reducing work stress, securing the environment, by observing risks and examining how to resolve them.

We can get the following benefits from using the risk register, 1. It serves as a repository for all identified risks, including their descriptions and potential impact on the project. 2. It contains analysis on each risk, it's likely occurrence and potential impact on the project objectives. 3. It outlines the planned responses for each risk and whether it should be avoided, mitigated, transferred or accepted. 4. It can be used as a tracking document to track status of all the identified risk and effectiveness of the risk responses. 5. It can be shared with the stakeholders to keep them informed on the project's risk profile. It also serves as a knowledge document for future references and learnings.

To elaborate on the Risk Report - • The risk profile section outlines the identified risks, their characteristics, and potential consequences. • Risk metrics provide quantitative measures to evaluate the significance and severity of risks. • Risk trends offer insights into how risks have evolved over time, enabling project teams to identify patterns or recurring issues. • Risk responses outline the strategies and actions planned or implemented to mitigate or address the identified risks. • Lessons learned to capture valuable insights and experiences gained from managing risks throughout the project I added this one - • Risk inclusion allows for the documentation and tracking of specific risk-related concerns or challenges.

In my experience, it is not uncommon for smaller organisations to place a disproportionately high emphasis on the measurement of qualitative risk rather than quantitative, because of its comparative ease of application. Whilst the subjectivity of qualitative risk measurement is often informed by useful experience and knowledge of industry dynamics, a longer and more sustainable approach to risk measurement requires the requisite investment in quantitative risk measurement tools. This investment includes technical modelling expertise, resources, and time.

It's critical to remember that risk is subjectively defined. Each person has a different appetite for risk and may consider factors differently. If you're evaluating risk as part of a team or for a project sponsor, be laser focused on how the project sponsor perceives risk and the factors that most matter to them. All the tools in the world may not offer support if you don't understand your audience and their personally defined attitudes about risk. In order to better understand the project sponsor's risk appetite, ask them to detail the factors that are most meaningful to them, what concerns they have, and whether they have preferred tools to assess project risk.