{"id":2808,"date":"2012-02-17T01:32:14","date_gmt":"2012-02-17T09:32:14","guid":{"rendered":"https:\/\/edelalon.com\/blog\/?p=2808"},"modified":"2020-12-01T16:24:21","modified_gmt":"2020-12-02T00:24:21","slug":"probability_vs_impact","status":"publish","type":"post","link":"https:\/\/www.edelalon.com\/blog\/probability_vs_impact\/","title":{"rendered":"Probability vs Impact"},"content":{"rendered":"

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 dictionary.com, “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.<\/p>\n

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\u2019s how real project managers handle risk.<\/p>\n

Project managers make a list of risks, the probability of hit happening, and the impact it will have in the overall project.<\/p>\n

The list will probably look something like this:
\nLocation: Tropical Island
\nDate: September to December<\/p>\n\n\n\n\n\n
Risk<\/td>\n\n
Probability<\/div>\n<\/td>\n
\n
Impact<\/div>\n<\/td>\n
\n
Total<\/div>\n<\/td>\n<\/tr>\n
Tornado<\/td>\n\n
0<\/div>\n<\/td>\n
\n
.9<\/div>\n<\/td>\n
\n
0<\/div>\n<\/td>\n<\/tr>\n
Typhoon\/Hurricane<\/td>\n\n
.5<\/div>\n<\/td>\n
\n
.5<\/div>\n<\/td>\n
\n
.5<\/div>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

In this list you\u2019ll mark down what the probability of it happening. A value ranging from 0 to 1, so .1, .2, .3, etc\u2026 And then you\u2019ll do the same for the impact. Impact is how much damage is done if the risk actually happens.<\/p>\n

Let\u2019s take a look at the risks above:
\nTornado<\/strong>: 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.
\nTyphoon\/Hurricane<\/strong>: The probability is .5 because it\u2019s definitely possible. The impact is .5 because people living on island are generally ready for typhoons\/hurricanes.<\/p>\n

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\u2019re going to respond to them.<\/p>\n","protected":false},"excerpt":{"rendered":"

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 dictionary.com, “exposure to the chance of injury or loss; a hazard or dangerous chance.” I’d like […]<\/p>\n","protected":false},"author":1,"featured_media":2809,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"tdm_status":"","tdm_grid_status":"","footnotes":""},"categories":[167,5],"tags":[161],"class_list":{"0":"post-2808","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-featured","8":"category-projects","9":"tag-project-management"},"yoast_head":"\nProbability vs Impact • Edel Alon<\/title>\n<meta name=\"description\" content=\"Hello, we have well thought out reading topics on technology, leadership, project management, food, weddings, and tools to help your daily life. 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