A risk matrix is a tool that helps you analyze risk by visualizing potential risks in a diagram. It allows you to weigh the severity of a potential risk against the probability that the risk might occur.
When to use a risk matrix
Risk matrices offer a clear, visual way to identify the risks involved in a particular decision. This allows you to take steps to avoid or mitigate negative outcomes by quickly identifying potential consequences of a choice.
Different risk matrices exist, but they all generally categorize risks in one of the following ways:
- Risks that are critical or high-priority should be dealt with immediately, as they are the most severe. Most teams choose to escalate these risks in order to meet a deadline or serve a need before it becomes unmanageable.
- Major risks should be treated with urgency, as they carry potential consequences that are only slightly less severe than critical risks.
- Risks that are classified as moderate are not a high priority and are typically associated with coming up with an alternate strategy to overcome a setback during a project.
- The team should only address minor risks once the others have been mitigated.
How to create your own risk matrix in 3 steps
The risk matrix is a grid of sticky notes that show the probability and impact of potential risks. This allows you to see all the risks you face and prioritize them by urgency. FigJam's whiteboard tool is the perfect way to create and share your risk matrix.
Open the whiteboard by Selecting the Risk Matrix Template and move on with these steps below:
Step 1: Come up with all potential risks
Invite all your team members to collaborate and try to come up with a list of risks that could affect your project. Categorize each risk according to how big of an impact it would have: low, moderate, major, or critical.
Step 2: Plot the risks on the matrix
Place the risks with the highest probability and impact in the upper right-hand side of the grid.
Step 3: Create an action plan
Explore the risks with the highest potential impact and probability and develop a detailed strategic plan to minimize these risks. The final outcome should be a step by step action plan that explores each risk and can inform future project management.
