Friday, April 26, 2024
HomeProjectsProbability vs Impact

Probability vs Impact

I’ve been thinking about how I do things in my life and found out that I have a built in mechanism on how I deal with risk. For those of you who don’t know, risk is, as defined by, “exposure to the chance of injury or loss; a hazard or dangerous chance.” I’d like to throw in that risk can also have a positive impact but that’s another post I need to do.

Here’s my internal mechanism for risk. Will it work, yes, do. Will it work, no, don’t do. These are my simple rules of risk and now that I think about it, I’m pretty risk adverse. Here’s how real project managers handle risk.

Project managers make a list of risks, the probability of hit happening, and the impact it will have in the overall project.

The list will probably look something like this:
Location: Tropical Island
Date: September to December


In this list you’ll mark down what the probability of it happening. A value ranging from 0 to 1, so .1, .2, .3, etc… And then you’ll do the same for the impact. Impact is how much damage is done if the risk actually happens.

Let’s take a look at the risks above:
Tornado: The probability is 0 because we live on an island. The impact is .9 because if there ever was a tornado on an island it would case a lot of damage.
Typhoon/Hurricane: The probability is .5 because it’s definitely possible. The impact is .5 because people living on island are generally ready for typhoons/hurricanes.

The next step is then to multiply the probability and the impact and then place it on the chart. If you have a lot of dots in the red zone you might want to put more effort in planning how you’re going to respond to them.

Previous article
Next article
Edel Alon
Edel Alon
Edel-Ryan Alon is a starving musician, failed artist, connoisseur of fine foods, aspiring entrepreneur, husband, father of two, geek by day, cook by night, and an all around great guy.


Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

- Advertisment -spot_img

Read More

Check These Out