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Risk Matrix
Risk Matrix
Risk Matrix
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Overview

We’re surrounded by risk but not all risk is created equal, and that’s where this matrix comes in.

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Actionable Takeaways
  • Brainstorm possible risks. 

Ideally consult broadly to identify possible risks, including analysing ...

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Limitations

Risk Matrices are simplified representations and as such do not capture the nuances of various risks, in particular they do not consider change of risk factors over time. They are also often generated through a consultative and co-design approach with a focus on qualitative interviews over quantitative data, which can lead to issues with cognitive bias and human error. 

In Practice

Electric energy organisation.

This academic paper from Science Direct describes a relatively robust approach taken to a risk analysis of an electric energy organisation. View the link to see the full paper, but the risk matrix is captured below.

Build your latticework
This model will help you to:

Coming from risk assessment, a risk matrix might be part of a project management toolkit and used at the commencement of a project. 

Use the following examples of connected and complementary models to weave risk matrices into your broader latticework of mental models. Alternatively, discover your own connections by exploring the category list above. 

Connected models: 

  • Probabilistic thinking: a fundamental way of approaching a challenge that lies behind a risk matrix. 
  • Inversion: in considering what could go wrong. 

Complementary models: 

  • Pareto principle: to identify key risks to worry about.
  • Second order thinking: to consider the impact beyond the initial event. 
  • Agile methodology: to test out ideas rather than commit to a long term, fixed plan. 
  • Risk minimisation framework: to gain courage in considering options, even with risks.
Origins & Resources

Napoleon has been credited with establishing a risk matrix with the consideration of likelihood versus consequences, though we’ve been unable to confirm this and have not attributed the model as a result (though I'd like to think that Napolean was behind this). 

My Notes

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