Risk Management: Align Risks with Goals and Initiatives

Learn how to map the results of risk analysis into risk indicators and track risk over time.

For more information about risk definition and risk management, check out this article.

Adding Risk

Follow these steps to add risk to a goal:

1. Select any goal in the scorecard.
2. Click on the Add button and select the Add Risk command.

The risk indicator from the template includes:

• Likelihood indicator
• Impact indicator
• Risk mitigation plan

Mapping the Results of Risk Analysis

By default, risk is configured to be calculated using the Likelihood and Impact indicators. To map the results of risk analysis, select each of these indicators and update values on the Data tab.

• Inherent value - corresponds to the baseline or starting state when the risk was detected.
• Acceptable value - corresponds to the desired or target state.
• Residual value - corresponds to the current state.

Tracking Risk Over Time

By default, the update interval of the risk indicator is configured to monthly updates. The tool will remind owners about the upcoming update intervals.

To update the risk estimation:

1. Select a date in the internal calendar.
2. Switch to the Data tab of the Likelihood or Impact indicators.
3. Update the value in the Residual field.

Risk Owner

Users or teams from the account can be assigned as owners of the risk or risk mitigation plan.

To assign an owner to the risk:

1. Select the risk indicator.
2. Switch to the General tab.
3. Add users or teams responsible for the risk in the Owners field.

To assign an owner to the risk mitigation plan:

1. Select the risk mitigation plan.
2. Click on the Details button.
3. Add users or teams responsible for the risk mitigation plan in the Owners field.

Risk Formula

To access the formula used to calculate risk:

• Select the risk indicator.
• Switch to the Data tab.
• Click on the Data source button.

The default formula for the risk is the multiplication of the progress of the Likelihood and Impact indicators. The use of progress in the formula allows measuring Likelihood and Impact on any scale, not necessarily on a 0..100 scale.

Risk Treatment Plan

The default template includes a risk mitigation initiative.

The risk diagram for the relevant risk indicator is visualized in the initiative dialog:

Adding details to the risk treatment plan:

• Track the progress of the risk treatment initiative by aligning the progress indicator via the Aligned KPI option.
• Assign users responsible for the initiative via the Owner section.
• Upload relevant documents via the Documents section.

Risk Heat Map

The risk heat map shows the total number of risks within each segment of the risk diagram. To display the risk heat map:

1. Point the Risk diagram to the root element of the scorecard
2. Activate the Browse recursively option

Aligning Risk with Other Items by Context

By default, the risk indicator is aligned with the goal where it is located. To align risk with other goals, indicators, or initiatives, follow these steps:

1. Select a risk.
2. Select the Copy command in the Tools menu.
3. Select an item to align the risk with.
4. Select the Paste command in the Tools menu.
5. Click on the Link by context button.

When a risk and an item are aligned by context:

• The connection will be visible in the Context for both elements.
• The risk will be shown in the Risk column for this item.

Aligning Risk with Internal Controls

The Impact and Likelihood metrics used to calculate the risk can be connected to other items, for example, to the effectiveness of internal controls.

Use one of two mechanics to align risk by data:

• Modify the formula of the risk, or risk impact, or
• Use the alignment by data function.

Customizing Risk Scale

By default, risk is measured quantitatively on a 0...100 scale. To add a qualitative scale to the risk:

1. Select the risk indicator and switch to the General tab.
2. Click the Edit button next to the Unit of Measure list.
3. Add a custom measure unit (for example, with possible options "Rare," "Possible," "Certain").
4. Change the role of the measure unit to Risk Likelihood or Risk Impact.

Uneven Distribution of Risk Zones

By default, the risk zones on the risk diagram are distributed proportionally between green, yellow, and red zones.

To configure uneven distribution:

1. Select the risk indicator.
2. Select the Stop-light settings command in the Tools menu.
3. Check the Enable checkbox and adjust the thresholds.