An insight to what is a Risk assessment matrix:
A risk assessment matrix is a method to check the probability of risks by doing a strong, logical, and professional analysis of the risks your company can face or cause that may be due to financing, reputation, and environment as well. A company or organization may face different risks at a time, and they need to be categorized and dealt with at the priority level according to their severity and importance to maintain the balance of the company.
The risk assessment matrix is a visual representation of the analysis of risks by showing percentage or by drawing graphs and labeling the risks according to the probability and severity with the help of numbers, bars, or colors.
It represents the importance of the risks and priority or harms of the risks that should be assessed and addressed at a most serious level. A risk assessment matrix should be adopted by every project manager to make the projects successful till the end by minimizing the chances of destruction or hazard.
Let’s move on to get better understanding of What is a risk assessment matrix.
Ways for doing risk assessment matrix:
If you want to make your company able to assess the risks at an earlier level, you need to follow some steps in the sequence to do it successfully. Those steps include identifying the risks you feel you may observe in the near future or during the completion of your project, classifying them into different categories based on the importance and more severity of the risk, analyzing the risk regularly and considering its impacts on the health of workers, environment, and growth of the organization you are working for.
A project manager makes sure to follow the needful steps to assess the risk regarding his/her project, analyze and do all the things to avoid the hazardous effects and falling prey to some legal sanctions. So, the steps a project manager needs to follow include:
Recognition of hazards
When you start a new project, you should be very clear about the risks you may face during its completion or after its completion. For this purpose, you need to identify the risks which may take place. If you are a project manager, being a leader of your team, you should discuss the risks with them and do brainstorming with your team that they might suggest the risks in a better way which are more likely severe or should be addressed on earlier and serious notes.
- Risks may be of various types like
- Financial
- Environmental
- Employees'
- Health-related
- Marketing
- Reputational
- Operational etc.
The risk assessment matrix helps us to identify and deal with the impacts of risks. You need to develop a list of the risks you and your team feel about the company and the company's policy or related to a particular project.
This list will help you to identify the nature and level of risks like the assets that can be stolen, the property that may get damaged, pollution that can be caused by your project, marketing drawback that your company may face, and other risk related to health or life of the workers working on the site.
All you need to do, first of all, is to identify the expected risks, their chances to happen, and the aftershocks your company may get due to these risks. The rest of the process will continue after the completion of the first and important step that is to recognize the risks.
It is important to discuss when knowing about What is a risk assessment matrix.
Analysis of the risks or hazards
After recognition of the risks, the next step is to analyze the risks you have included in the list. When you have determined the criteria of the risk, you are in great need to calculate and set the probability of the risks to happen.
For this purpose, there is required a strong and professional analysis according to the field or criteria of the risk. It should be analyzed by the specialist of that particular risk field. If you have identified a security risk, it's not enough to install antiviruses and set just-in-time access for employees; you need to have a meeting with the security supervisor, share your point of view, and also listen to what he is saying.
- Prepare the sheets or templates to keep a record of your meeting and the analysis you have made with your team.
- You can use a bar graph, pie graph, tables, and different colors to represent the risks, their nature, and the criteria. It is a more critical step and needs to be dealt with great care and attention.
- Analysis should always be quantitative instead of qualitative as it is not measurable, and you cannot make good estimations at all.
- By doing qualitative analysis, a project manager can define the chances or probability of the risks that can take place.
It helps a project manager to take essential steps to cope up with the risks by lessening the harm or danger by setting different strategies. This analysis is key when you are into discussion of What is a risk assessment matrix.
Taking into count the impact level of risks on your project
All the risks are not of the same level as per their severity, nature, probability, and the harm that can be caused due to it.
Some types of risks are slightly dangerous and can be covered easily without facing a huge disaster, and some risks cannot be neglected at any cost and should be addressed on an immediate call, like the safety of the workers working on the site.
Unfortunately, if the site is not safe in the sense of providing strong support to move upward through lift while working on a construction site, the workers may get an injury or even can lose their lives.
Being a project manager, you have to look into the matter before time and ensure the safety of the workers your priority. A company or organization may face different risks with different impacts that might be,
- Negligible impact risk
- Average impact risk
- Peripheral impact risk
- Highly critical impact risk
- Devastating impact risk
Negligible and average risks can be compromised in some cases and be dealt with afterward or later, but if we move forward to highly critical and devastating impacts of risks, there is not a single possibility of neglecting or delaying them. They should be addressed on the first row as they are most likely concerned with the health of the persons or environment.
Classification and prioritization of risks
When a project manager has developed a list of risks, analyzed them according to their criteria and the harm they can cause, and explore their impact by doing brainstorming with his team members, now it is the turn to classify the risks into the groups especially based upon the severity. Risks can be categorized into the groups during the risk assessment matrix into:
The risks that fall in this group are those risks that require immediate attention and solution. These risks should not persist for a long time; instead, they should be noticed and overcome in the first attempt and continued with more betterment in the future.
These risks are slightly less severe than the dreadful risks, but they also need quick and immediate attention and response to avoid huge disasters.
These risks are of moderate severity that should be dealt with after dreadful and highly severe risks.
These risks are not too much severe like the first two types of risks and can be dealt with later and somehow be compromised sometimes if you are dealing with dreadful and highly severe risks.
Set the strategies to reduce the impacts of the risk
The last step after assessing, categorizing, and exploring the impacts of risks, there is a great need to set suitable strategies to ensure these risks are not going to disturb the company's economy, environment, the health of the employees, many other things that should be considered. A project manager, with the help of his team, makes a set of solutions to minimize the severity of the risks and ensuring the lowest or no harm to the business, environment, and employees.
Importance of risk assessment matrix
A risk assessment matrix plays a vital role in sustaining a business, project, or company's existence because it helps.
- Before time dealing with the hazards
- Avoiding severe loss or harm
- Saving many lives and the environment as well
- Developing the strategies to cope up with the impacts of risks
Final Remarks:
A project manager should not skip the risk assessment matrix at any cost when he/she is going to start a new project for a company or an organization. It plays an important role in sustaining the company's reputation, growth, and development but also helps to improve the environment, ensures the safety of workers, and avoid legal sanction that can be applied after happening a misshape. We hope this guide answers you What is a risk assessment matrix in a detailed way.
