Author: Manu Steens
(inspired by “Risk Management – Concepts and Guidance” by Carl L. Pritchard)
Purpose of this type of assessment:
Classically risks are evaluated on a risk matrix, with typical colors red, orange, yellow and green, to decreasing values of the risk. The boxes in that risk matrix that have the value depend on the probability and the impact of the risk event. Within one such box can put more than one risk. These can then all be handled and impacted in the risk register. Yet there are still reasons to take one risk, such as a shortage of personnel, before another. The question then is in which order these will be prioritized. An urgency assessment is required for this.
Construction of a template:
Since an urgency assessment is assigned to an organization, two sets of inputs are required:
– The brainstorm for drawing up the template
– Fit the inputs of the project / process / objectives / strategic risks to the template.
The former need knowledge of the environment of the organization. This is often dependant on the organization. Because of that, a template can often be reasnably uniform within an organization, but this can change over time with the environment variables.
The template is drawn up as a table, with evaluation criteria per row, and score descriptions per column.
The outputs of this assessment is a score one obtains as the sum of the values of the applicable columns, per row. The higher the score, the more urgent the risk must be treated.
Example of a template:
|Project name:||Risk event:|
|Experience of the project / process / objectives team with this type of risk.
||Knowledge of / competence in workarounds and ad hoc solutions for this type.||Some experience in dealing with this type of risk among the team members.||One or two team members who have experience with this type of risk.||No member of the team has experience with this type of risk.|
|Chance that the risk occurs before the next review.||The probability is higher the later in the project and it does not occur for the next review.||The probability is just as high later in the project as before the next review.||The probability is high prior to the next review.||The probability is highest the following two time periods (eg weeks, months).|
|Customer sensitivity||The customer has no expectations regarding this risk and would suggest that we solve it.||The customer expects this problem to be resolved immediately without delay.||This risk affects multiple modules and quickly occurs in the project.||This risk affects multiple modules and the project / process is highly dependent on each of them.|
|Complexity of / integration in the project / process / objective||The risk only affects one module of the project and that module can be handled independently.||This risk affects the entire project / process but only occurs at the end of the life cycle of the project / process.||This risk affects multiple modules and occurs early in the project / process.||This risk affects multiple modules and the project / process is highly dependent on each of them.|
|Visibility||This risk can easily be identified in advance, which allows for a last minute intervention.||The risk has a few recognizable features that allow for early identification.||This risk is only identifiable when it occurs.||This risk is only identified when it has happened.|
Steps in using this technique:
The first step in building this template is to determine the types of criteria that make one risk more urgent than the other. Criteria that indicate that one or more events are about to arrive.
The second step is to create a scale. For each criterion you determine a numerical scale that indicates the influence on the urgency of the risk, running from a high number for a high urgency to a low number for a low urgency. (In the example there is only a single numerical scale.)
Step three: validate the template. Validation can be performed by testing against a number of well-known cases of high and low urgency. If the template differs from what is known from the history of the cases, the scales must be adjusted.
Step four: evaluate all major risks. These are typically the risks in the red and orange zone of the risk matrix.
Step five: prioritize the risk events. Red risks with a high urgency should be given priority on, for example, orange risks with a lower urgency.
Step six: Arrange the risk register according to the priority and implement the measures.