A risk matrix is a simple visual tool that can be used to determine risk levels.
Sergio Vergara
Sergio Vergara
February 20, 2024 — 6 minutes reading time
Risk matrix: what it is and how to evaluate it for project success
Photo by @Jonny Rogers on Unsplash
Although risk matrices have some limitations (partly due to their simplicity), they also offer numerous benefits. They provide an accessible overview of the risks your project faces, potentially making it easier to decide how the risks should be addressed.
Let’s take a deeper look at what a risk matrix is, effective conduit cn mobile numbers list examine the pros and cons, and how you can create and use a risk matrix in your project.
What is a risk matrix?
A risk matrix is a tool that can help you visually understand the risks your project faces and their overall likelihood and severity.
All risk matrices follow the same basic structure. They are typically 5x5 grids that show the likelihood of risks occurring along the Y-axis and the severity of their consequences along the X-axis. Each axis follows a scale from very low to very high risk. The risks your project might face are placed within the risk matrix depending on where they fall on this scale. This helps you determine risk levels.
Severity x Probability = Risk Level
If the risk is high on the probability scale and high on the severity scale, the risk level can be defined as very high. Conversely, if the risk is low on the probability scale and low on the severity scale, the risk level would be very low.
Within a risk management matrix, risk levels are further highlighted with a color-coded system. A risk that has a low overall risk level is color-coded green. If it is medium, it is shown in yellow or orange. A high overall risk is represented in red. This traffic light system makes it easy to quickly understand risk levels.
Despite this basic structure, a risk severity matrix can vary widely depending on your organization and how you use it.
For example, the probability axis can be broken down into more specific categories, such as “certain,” “likely,” “possible,” “unlikely,” and “rare.” Categories along the consequence axis could be labeled “very low,” “low,” “medium,” “high,” and “extreme” or “catastrophic.” How you label these categories depends entirely on how you want to fit your project.
Examples of a risk matrix
risk-matrix-1
As you can see, the risk matrix is a fairly simple tool, although it can become more complex depending on how you decide to use it within your project.
Imagine you are carrying out a risk assessment for your daily life. There are many risks we might face every day, many of which we don't even think about. Some risks from ordinary activities might be: