Risk Quantification
Often risks are only described qualitatively. They are identified and assessed. Usually mitigation of some sort is put in place. For certain risks it may however be possible and valuable to quantify them in terms of probability and impact. There are various judgmental methods that can help with this: the so called Italian flag method to assess the probability of a future risk event, the method of Range assessment to estimate a range of a variable, and the method of Analysis of Competing Hypotheses to arrive at relative weights of multiple scenarios.
The practical decision tools are really helpful. I was able to immediately apply the Italian Flag technique to help others quantify a key risk in an important decision. In the past we would have approached it more intuitively and suffered all the challenges of a subjective risk assessment. Using the simple tool helped us quantify the risk based on objective evidence. The result was clarity on the risk and stronger alignment among stakeholders.
How to skill up
Virtual Learning Bite
Develop your understanding to awareness level by going through virtual learning bites.
The virtual learning bite ‘Italian flag’ discusses a method to arrive at a judgmental probability of a risk.
The virtual learning bite ‘Range assessment’ discusses a method to arrive at a judgmental numeric assessment of a variable.
Online Course
Get to knowledge level understanding of risk quantification by doing an online course. This gives a broader perspective than standalone virtual learning bites. It takes about 10 hours.
Upskilling Program
Topics related to Risk Quantification can also be embedded in a full Upskilling Program. The advantage of this is that the techniques can more easily be related to other tools and concepts from the domains of decision analysis and risk management.