Step-4 Evaluate Risks
· Goal: Assess on “what could go wrong” with high-score alternatives in the future.
Step-4 Evaluate Risks
· Goal: Assess on “what could go wrong” with high-score alternatives in the future.
Substep-1: Recognize Risks
· Goal: To identify potential Risk related with each of the Alternatives.
· Output: List of risk that could be happened with the Alternatives.
· Ask the following question:
o What is the potential RISK if this Alternative is selected?
o What is the DOWNSIDE (consequences) if RISK is happened?
· Get risk List from:
o Consult with Subject Matter Expert.
o Opinion of experience personnel or people with pessimistic viewpoint.
· State Risk in the following sentences: If the (RISK) become true, then the (DOWNSIDE) is………..
Substep-2: Evaluate Risks
· Goal: to have a measurement of Risk.
· Output: Have score of High, Medium and Low for Impact and Probability of each risk.
· Note: Use Risk measurement of: High, Medium, and Low.
· Evaluate each RISK based on these 2 factors:
o Probability. How likely this will happen.
§ High (H): Expected will happen in a future.
§ Medium (M): Has been happened in the past, expected to appear again in a future.
§ Low (L): Never happened in the past, and will have a low chance to appear again or will only happen in a rare occasion.
o Impact. What is the consequence if it happened?
§ High (H): Expect a corporate-wide organizational and financial impact, which affecting all aspect of organization.
§ Medium (M): Will only affect a certain number of division, department, or specific group of personnel.
§ Low (L): Limited to single or specific individual.
Step-5 Make Decision
· Goal: Acquire best alternative.
· Output: A selected Alternative, with best fulfilled criteria and has an acceptable risk.
· Ask
o Which alternative has unacceptable risk?
o Are there any ways to mitigate risk?
o Is the return of the alternative worth taking the risk?
Conclusion
· This process, back then provide us to better think through the real objectives and what need to be done to get into that objectives.
· Under time pressure, decision can be made by considering a few key objectives and obvious risk.
· As for the background story before – we’re able to decide clearly what need to be done back then – and decide the things that we don’t considered before (because we thought it was too obvious and then it was opt-out from the alternatives) – IMHO really helpful, and I believe my colleagues think the same way.