Prioritising Risks and Opportunities on the same scale

Although the Management System Standards expect you to prioritise your risks and opportunities (essentially planning) how can this be achieved? When should an opportunity take precedence over a risk? This article provides a method to assist with assessing and prioritising risks and opportunities on the same scale.

Assessing Opportunities

According to ISO 31000 risks can be positive too, so this is really what the Management System standards call an opportunity. But how can you assess an opportunity (a positive risk) in terms of likelihood? The likelihood of an opportunity eventuating if you do nothing as opposed to something? Well duh, of course if you do nothing it’s unlikely to eventuate and if it eventuates without you doing anything then is it really worth logging? So is it the likelihood of your actions bringing about the consequences? Well that surely depends on what you do. ISO 31000 provides no guidance.

It is clear that assessing the likelihood of an opportunity is difficult. What we need to do is take advantage of the best opportunities first, so we need a different method of assessment.

Instead of likelihood why not consider effort? Low effort is good and high effort is bad. That way we focus on the opportunities we don’t have to do much to get through. If we then combine this with a consequence assessment focused on value we can develop an easy method of assessing opportunities.

Aligning Risks and Opportunities

So we now can align the results of opportunity assessments against a similar risk matrix, but should we? Do we want to consider a high ranking opportunity as the same as a high ranking risk? I would suggest generally not – I’m not sure that SafeWork or the EPA would approve too highly of that approach. You could write a procedure that says an opportunity shall never take precedence over a similarly ranked risk, but this requires people to remember to implement it.

Much better if the opportunity matrix is less likely to compete with risks in the first place so something like the following may be better.

When comparing the Revised Opportunity Matrix with the risk matrix above you can see that we have reduced the likelihood of the opportunity matrix producing a High result. So if they were on the same scale we would generally be putting risks ahead of opportunities.

Combining the learning from this article with the Integrated hierarchy of control allows you to develop a single method for the management of safety, environmental and quality risks and opportunities.