An Alternative Risk Matrix Template: Welcome to the Matrix

If Einstein were a management guru, he perhaps would have said that managers don't play dice, but how wrong he was! All of management is about controlling risk. If there were no risk, there would be no need to manage anything because positive outcomes would be guaranteed. This article presents an alternative risk matrix template.

God doesn't play dice but managers do.

Risk management is a complex topic that is all about the dreaded concept of statistics. Most managers don't understand statistics and need something simple to help them through the necessary risk management sessions. They use a risk management template to make the topic understandable for the not so mathematically inclined.

Around the world, businesses are using simple matrices to manage risk. People gather around a table and argue whether a risk is low, medium or high. In most cases without proper consideration of the actual statistical issues.

Risk matrices are a poor proxy for real risk management and suck up a lot of resources to 'manage' trivial risk.¹ Risk matrices provide false confidence in the actual risk profile and, more often than not, produce outcomes that do not add any information to the situation other than the ability to provide colourful overviews. The best outcome of any risk matrix exercise is that at least all risks have been discussed and acknowledged. The actual outcome of the matrix rarely has any bearing on the way the risk is managed; it is merely a category.

A risk matrix is a security blanket for higher management and the board to feel secure that the rest of the organisation knows what they are doing and will not expose the organisation to unacceptable risks.

Alternative Risk Matrix Template

At the Lucid Manager, we have created an alternative risk matrix that you can use to inform your management decisions. We bring risk management to life without boring and meaningless numbers, but practical device. Download this picture, assess the likelihood and consequence of your risk and act by this schedule. Success at your next risk management session is guaranteed!