Tusler’s Risk Classification Scheme provides us key lessons on managing project risks. Project Management Institute defines project risk as an uncertain event or condition that, if it occurs, has a positive or a negative effect on a project’s objectives.
Any risk has 2 characteristics:
1) Probability is the likelihood that the risk will affect the project.
2) Impact is the effect of the risk on the project or consequences for the project.
Risks can hence be categorized into 4 quadrants:
Risks that are in High Probability-High Impact quadrant are most likely to occur and will have the maximum impact on the project.
Risks that are in High Probability-Low Impact quadrant are most likely to occur but will not have severe impact on the project.
Risks that are in Low Probability-High Impact quadrant are not likely to occur but if they occur, they will have severe impact on the project.
Risks that are in Low Probability-Low Impact quadrant are not likely to occur and even if they occur, they will not have a severe impact on the project.
Robert Tusler developed an innovative model to classify the risks. Commonly known as Tusler’s Risk Classification Scheme ( © 1998) , this model metaphorically links Risks to animals.
Key lessons that can be drawn from Tusler’s classification scheme can be summarized as below:
The animal metaphor is an innovative approach as it makes it easier for stakeholders and project team to understand the project risks. It also helps the PM gain much needed appreciation of the Risk Management process that the PM has implemented on the project.
If you have any suggestions or best practices, please share them here and increase the pool of shared meaning.