Risk Template in Excel Training • Risk Matrix: Change Risk Zones

Video Training for Risk Matrix Settings: Change Risk Zones

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In this training, I will briefly explain how to change Risk Zones in the Risk Matrix Settings tab of Managenable® risk template software.

Risk Matrix Settings Tab

In the Risk Matrix Settings tab, you can assign risk zones to different parts of a risk matrix.

Zones Column

A risk zone is a combination of the 2 risk components: a Likelihood level…

Levels For Likelihood Component

… and a Consequence level.

Levels For Consequence Component

Therefore, a Risk Zone is a way to refer to a Risk Exposure.

Furthermore, a Risk Zone enables to refer to a Risk Exposure without using any wording which may trigger various interpretations.

For example, instead of referring to a Critical Risk or a Dangerous Risk, we would simply refer to a risk in Zone 5.

Risk Matrix Zone 5

This is the same concept as referring to a Consequence Level 5 instead of referring to a Catastrophic Consequence…

Consequence Level 5

… or referring to a Likelihood Level 1 instead of referring to a Very Unlikely Occurrence.

Likelihood Level 1

Indeed, the concept of Risk Zones is directly related to the notion of Risk Criteria, or Risk Tolerance…

Risk Criteria Tab Title

… and, it is also related to the notion of Risk Appetite.

Risk Appetite Tab Title

For more information on the Risk Criteria tab, and the Risk Appetite tab, please refer to the relevant training.

In the Risk Matrix Settings tab, you can select 5 Risk Zones in a Risk Matrix.

The Zone 5 is for risks which have, at the same time, the highest Likelihood levels, and the highest Consequence levels.

Therefore, the Zone 5 refers to the highest Risk Exposure.

Risk Zone 5: Highest Likelihood and Consequence

The Zone 1 is for risks which have, at the same time, the lowest Likelihood levels, and the lowest Consequence levels.

Therefore, the Zone 1 refers to the lowest Risk Exposure.

Risk Zone 1: Lowest Likelihood and Consequence

Any other Zones between Zone 5 and Zone 1 refer to risks which exposures are between the highest and the lowest.

For example, risks with a Likelihood level 1, and a Consequence level 5, are currently set to Zone 3.

Risk Zone 3: Likelihood 1 and Consequence 5

However, if you click on the drop-down list, you could change from Zone 3 to any other zone, for instance, Zone 4.

Select Zone 4 In Drop Down List

The change is immediately reflected throughout the risk management tool.

All risks with a combination of Likelihood level 1 with a Consequence level 5, will now be interpreted as being in Zone 4, and not in Zone 3 anymore.

Selected Zone 4

The selection of Risk Zones in the Risk Matrix Settings tab, or, if you prefer, the selection of the 5 levels of Risk Exposure, is a critical step for designing the Risk Matrices, or Risk Heat Maps.

It is also a critical step with regard to the overall risk management practice, and it must be considered from the point of view of Risk Appetite, and, Risk Criteria or Risk Tolerance levels.

In summary, the use of Risk Zones is a very convenient way to refer to Risk Exposures, without having to interpret any words qualifying those exposures.