Deficiencies in and Alternatives to Heat Map Risk Matrices for Project Risk Prioritization
Heat map risk matrices are widely used to prioritize risks. They are Standard Operating Tools for risk management as prescribed by the Project Management Institute (PMI), International Council on Systems Engineering (INCOSE), and many other organizations. They are widely used in projects and programs structured for product development, business, construction, R & D, medicine, and politics. However, they suffer from several weaknesses, notably subjectivity, symmetry, category prioritization reversal, and a failure to account for Risk Aversion, which often dominates how individuals and companies feel about risk. Because of this, they can lead to serious mis-prioritization and mismanagement of risks. We propose an alternative to the standard risk matrix that accounts for these deficiencies and provides a significantly better risk prioritization tool. Two field trials were conducted to demonstrate the benefits of the alternative method for project managers.