Once a Risk Score is calculated based on the Risk Matrix, NASA recommends the following:
<ul>
<li>Lowest Risk: Put the risk on the watchlist and re-assess on a regular basis.</li>
<li>Low Risk: Perform further research and re-evaluate risk trying to better understand it, and facilitating a reduction of the same. Write a ‘risk mitigation plan’ and share it with the team.</li>
<li>Medium Risk: Along with the mitigation plan, perform continuous assessment of the risk, assign resources, and keep everyone informed.</li>
<li>High Risk: Immediately escalate to the higher authorities, letting all the stakeholders know of the same.</li>
<li>Highest Risk: Consider changing the original plan of action and shelving or delaying the project right away. Speed is of the essence and hard but unavoidable decisions have to be made to minimize damage and loss of life.</li>
</ul>

Mitigating Risk

The two main factors that impact the level of risk:
<ol>
<li>The Likelihood: How likely is the risk of the potential change to occur.</li>
<li>The Consequence: The level of the impact of the departure from the original plan.</li>
</ol>
The consequence ‘scorecard’ evaluates the likelihood of the risk and the level of impact (like loss of human life, or the impact on the main goal) to determine the severity of the risk.

NASA Risk Matrix: Likelihood And Consequence

NASA is routinely dealing with problems that are as complex as they can get. Apart from having a process about measuring creativity, or a detailed checklist to take stock of every minute detail, they also have a Risk Matrix, a powerful tool that helps to identify and manage risk.
It is a diagram that provides the ‘likelihood score’ of the potential risk, when all the risks have been identified, and has a template that makes stating the risk easy.

Managing Risk Like NASA

"Progress always involves risks. You can’t steal second base and keep your foot on first."

NASA identifies any potential risk using the following variables:
<ol>
<li>Condition: A fact-based situation that is causing concern or doubt.</li>
<li>Departure: The variation or potential change that the condition will cause.</li>
<li>Asset: The project which gets delayed or affected.</li>
<li>Consequence: The potential damage or negative impact that the ‘condition’ can have on the ‘Asset’.</li>
</ol>
The Risk Assessment has to only include facts, and not speculations or assumptions, while ensuring that the risk identification does not introduce new risks.

NASA Risk Matrix: Likelihood And Consequence

Managing risk with the NASA Risk Matrix

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