Traffic lights for danger
A traffic light needs no words. Red means stop. Green means go. Amber means watch out.
Risk teams use the same three colours. One look at a list tells the manager which risks need action today.
By the end of this lesson
Note
I can rate a risk with red, amber and green, and I can say when a number is better.
Key words
| Word | What it means | Example |
|---|---|---|
| Qualitative | describes a risk in words or colours, not numbers | High, medium, low |
| Quantitative | describes a risk with numbers | It will cost 1500 pounds. |
| RAG rating | a red, amber or green mark for how serious a risk is | |
| Severity | how serious the harm would be | |
| Cost overrun | spending more money than the budget allows | |
| Resource | something a job uses up, such as time, money, disk space or staff |
The cells students fill in are left blank in this preview.
Starter
Have a go
Starter
3 questionsYour answers are marked here and are not kept. A college account keeps every student’s marks.
Qualitative: words and colours
A qualitative approach does not use numbers. You describe the severity of a risk with a colour.
This is the RAG rating. It is quick, and everybody can read it. The weakness is that two people may not agree what "amber" means.
What each colour means
| Colour | Level of risk | What we do |
|---|---|---|
| Red | High risk | Act immediately |
| Amber | Moderate risk | Watch it closely |
| Green | Low risk | No action needed now |
The cells students fill in are left blank in this preview.
Quantitative: numbers
A quantitative approach uses numbers. You work out the effect of a risk, for example a cost overrun or how much of a resource is used.
Numbers are exact and easy to compare. But you need good figures, and they take time to find.
Worked example: two numbers for one project
| Measure | Plan | Real | Result |
|---|---|---|---|
| Money for new switches | 5000 pounds | 6500 pounds | Cost overrun of 1500 pounds |
| Disk space for backups | 100 gigabytes | 40 gigabytes used | 60 gigabytes left |
| Engineer time | 10 days | 12 days | 2 days over |
The cells students fill in are left blank in this preview.