Not rocket science here. We’re looking at estimating three factors.

• The likelihood of the event occurring
• The impact of the event occurring
• The timing of the event – how soon the event might occur

And yes, when I say estimate, at this point, I really do mean ESTIMATE. Use whatever approach you like, but if you have more than four or five ‘buckets’, you’re doing too much.

 

Likelihood

Start with how likely you think it is that the event will happen. I like to go with only three measures for the first set of risks I identify – extremely unlikely, unlikely, likely, almost certain. They are buckets. There are things of different sizes in each bucket. That’s okay. We’re not looking for precision here, just a relative measure. Over time, I sometimes add a lower or a higher, but first, I try to keep things as simple as possible.

 

Impact

Then take a look at a score for if it happened today, how much would it hurt? The TODAY is important. Yes, there are many, many things we can put in place to manage the impact of an event, but until they are in place, you haven’t managed the impact. This is often called the severity score. This score assumes that you have no preparation time. I like to use meaningful, somewhat emotive words for this.

• The lowest impact? Immaterial – it would have an effect, we’d have to do some stuff, but there is no material effect to what we’re doing.
• Next up is Material – we’d have to respond in such a way that other things would have to move – think traditional project levers here, you’re probably going to have to make some time, cost or scope changes to manage the impact.
• Then Critical – the changes made to absorb the impact affect our ability to reach a successful outcome.
• The highest impact? Catastrophic. If this happened today, we’re screwed. Pack up your bags, we’re going home. Or moving to Patagonia.

In my mind, there’s also a general assumption that immaterial and material can typically be managed by the team. Critical and catastrophic? We’re going to need some help.

 

Timing

How soon could this happen? Could it happen today? Is it something that’s going to hurt later on? What? Again, I still to pretty simple here. Now, Next and Later.

Depending on your project the definition of these could vary widely, but we’re probably all agreed on what now could mean.

So … Next and Later? If I was working on something that was about six months in length, I’d probably go with:

• Now = this week and next week
• Next = week after next to the end of next calendar month (the window, on any one day, could be between one and two months).
• Later = everything after that.

This also gives you a nice cadence to reassess on a fortnightly basis.