A Heat Map is a tool that help us understand and visualize both the likelihood of a risk occurring, and the level of impact that its occurrence would have.
When to use it? A Heat Map can be helpful when you have an understanding of what risks exist for a given project or scenario, but would like to spend more time assessing the severity and likelihood of that risk taking place.
How to do it? Identify the risks (positive and negative) for a project Draw a graph with ‘likelihood’ on the y axis, and ‘’impact’ on the x axis. Make each axis on equal scales, such as 0-5. Rate each risk’s likelihood of occurrence, and impact of occurrence. Multiply the likelihood by the impact to receive the score for each risk. Plot the risks that you’ve identified onto the graph, where a score of 0 would be a low likelihood of occurrence, and a low impact to the project if that risk took place, and 25 would be the score for a risk that is very likely to occur, and could prove to be catastrophic. Assess where the bulk of the risks are plotted on the graph, and what that indicates about the level of risk for a given scenario (e.g. are most of the risks high impact and high likelihood?).
Requirements
People: 2-10 Time: 60 minutes
Pros and Cons
Pros: - Can help focus a conversation around risk
- Can help develop consensus around which risks mitigation strategies should focus on
Cons: - It is a subjective assessment of both likelihood and impact
- It may be difficult to assign numerical value to risks that are less quantifiable (e.g. ‘loss of public support’)
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