Prioritizing Risks
Prioritizing risks involves deciding whether risk events are worthy of attention. Placing one risk next to another risk enables you to achieve clarity and understanding beyond risk analysis. For example, you might have to decide between losing $1 million on a $40 million project or coming in a month late on a critical project with a $40 million client. Although neither risk is good, it might not be possible to respond to both.
Prioritizing risks also highlights when you are using too fine a level of detail in your risk analysis. The process of prioritizing risks also allows you to develop a sense of your project's and organization's level of risk tolerance. Prioritization is effective only when you use defined selection criteria.
To prioritize risks, confer with team members and use the following practical approach:
When prioritizing risks, working as a team is an important, although challenging, task. Team members might often have different opinions about the impact or probability of a risk because the risk might not have an amount of money associated with it. For many risks, the impact and probability can be expressed only in relative terms.
Avoid planning response strategies during this step.