Using the Risk Assessment Matrix
Once the risks have been placed in the matrix, in cells corresponding to the appropriate likelihood and consequences, it becomes visibly clear as to which risks must be handled at what priority. Each of the risks placed in the table will fall under one of the categories, for which different colors have been used in the sample risk assessment template provided with this article. Here are some details on each of the categories:
Extreme: The risks that fall in the cells marked with ‘E’ (red color), are the risks that are most critical and that must be addressed on a high priority basis. The project team should gear up for immediate action, so as to eliminate the risk completely.
High Risk: Denoted with ‘H’ with a pink background in the risk assessment template, also call for immediate action or risk management strategies. Here in addition to thinking about eliminating the risk, substitution strategies may also work well. If these issues cannot be resolved immediately, strict timelines must be established to ensure that these issues get resolved before the create hurdles in the progress.
Medium: If a risk falls in one of the orange cells marked as ‘M’ , it is best to take some reasonable steps and develop risk management strategies in time, even though there is no hurry to have such risks sorted out early. Such risks do not require extensive resources; rather they can be handled with smart thinking and logical planning.
Low Risk: The risks that fall in the green cells marked with ‘L’, can be ignored as they usually do not pose any significant problem. However still, if some reasonable steps can help in fighting these risks, such steps should be taken to improve overall performance of the project.