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4 February 2007

Risk Management 101: Risk Assessment and Prioritisation

Prioritisation is a tool to communicate and agree on what risks are to be actioned most urgently. It sets expectations and allows for people to understand where a particular risk falls in the project’s workload.

If there is disagreements about priorities the likelihood and impacts can be revisited, and maybe a risk can be re-prioritised. This is likely in many projects as the uncertainty of the future diminishes and the likelihood of risk events occurring is better understood.

The diagram below is a typical tool for representing a project’s risks at a strategic level. You may identify several dozen risks and the number of risks (or the risk reference numbers) can be listed in the boxes representing each likelihood/impact assessment. This then gives an overview of the risk profile of the project.
It also highlights which things are priorties to be dealt with.