I asked ChatGPT for an assessment of the limitations and hazards of using the conventional risk matrix -- of impact vs probability in a matrix format -- in project management.
The
risk matrix is a commonly used tool in project risk management, but it has
several potential limitations, including:
1.
Over-simplification:
A risk matrix can reduce complex risk factors into simple numeric values and
colors, which can lead to oversimplification of the actual risk.
2.
Lack
of consistency: Different people or organizations may use different criteria to
assign numeric values to risks, leading to inconsistencies in risk assessment.
3.
False
sense of precision: The use of numbers and colors in a risk matrix can give a
false sense of precision and accuracy, even though the underlying risk
assessment may be subjective and based on limited information.
4.
Lack
of context: The risk matrix does not provide enough context or information
about the risks being assessed, making it difficult to understand the
underlying causes and potential impacts of risks.
5.
Limited
scope: The risk matrix only considers risks that have been identified and may
not take into account unknown or emerging risks.
6.
Over-reliance:
Risk matrices are often used as the sole tool for risk assessment and
management, leading to oversimplification of complex risks.
7.
Limited
detail: Risk matrices provide limited information about individual risks and
often do not include mitigation strategies.
8.
Qualitative
vs Quantitative: The use of qualitative information to assign risk scores in a
matrix can lead to subjective interpretations and inconsistencies between
users.
9.
Inflexibility:
Risk matrices are static, making it difficult to reflect changes in risk as a
project progresses.
10.
False
sense of security: The use of color-coding and other visual aids can create a
false sense of security about the level of risk present in a project.
11.
Lack
of integration: Risk matrices are often used in isolation, without being
integrated into the overall risk management process.
12. Culture and politics: The way risks are perceived and prioritized can be influenced by organizational culture and political considerations.
Not mentioned: Random number arithmetic.
To that fairly complete list I would add that if the impact and probabilities are given numerically, regardless of their calibration or built-in biases, the numbers should be understood to be 'random numbers' drawn from (usually unknown) statistical distributions.
'Random numbers' ordinary arithmetic between them is invalid. Only statistical processing of their distributions is technically possible. And that is often a 'bridge too far'.
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