Risk and How to use a Risk Matrix

Summary

The video explains the concept of risk as the combination of the likelihood of exposure to a hazard and the severity of the outcome. It provides examples of assessing risk in various road crossing scenarios with bikes or trucks. A key tool introduced is the risk matrix which plots likelihood against consequence to categorize risk as low, medium or high. Risk matrices allow visualization of risk levels based on categorized measures of likelihood and consequence. Despite limitations, they offer a practical way to consistently rate risks in context.

Takeaways

• 😲 Risk can be thought of as the product of likelihood of exposure to a hazard and the consequence/severity of the outcome
• 📊 Risk matrices allow visual representation of risk using likelihood and consequence
• 🟢 Low likelihood + Low consequence = Low risk
• 🟡 High likelihood + Low consequence = Medium risk
• 🟡 Low likelihood + High consequence = Medium risk
• 🔴 High likelihood + High consequence = High risk
• 📈 Risk matrices help categorize different risk levels and make decisions
• 🤔 Risk perception can vary between people and contexts
• ❗Risk matrices have limitations like subjectivity and inconsistent interpretation
• 🟠 They are still a practical tool for risk assessment with some caveats

Q & A

What are two key components that make up risk?

The two key components that make up risk are likelihood, which is how likely someone is to be exposed to a hazard, and consequence, which is how severe the outcome will be.

How can you visualize and categorize levels of risk?

You can use a risk matrix, which is a table with likelihood on one axis and consequence on the other, to visualize and categorize levels of risk as low, medium or high.

What were the likelihood and consequence when there was an infrequent number of bicycles on the road?

When there was an infrequent number of bicycles, around one every 5 minutes, the likelihood of a crash was low and the consequence was also low. Therefore the overall risk was low.

What were the likelihood and consequence when there were trucks instead of bicycles, at the same frequency?

Even with trucks only coming by every 5 minutes, so a low likelihood of a crash, the consequence if there was a crash would be high. Therefore, the overall risk was medium.

Why wouldn't you consider crossing the road if it was a busy truck route?

If it was a busy truck route, that means trucks would be going by very frequently. So both the likelihood of getting hit and the consequences if you did would be high. This puts the overall risk level in the high category.

How might categories in a risk matrix be defined?

For likelihood, high could mean an event is expected to happen often, while low means very rarely, such as once per 100 years. For consequence, high may involve multiple deaths while low means only minor injuries.

What are some limitations of using a risk matrix?

Limitations include being subjective or open to interpretation, not accounting for different time frames, and that people may not interpret the categories consistently.

Why is risk assessment important in certain situations?

Risk assessment enables appropriate actions to be taken in situations involving potential hazards, such as with new viruses, industrial accidents, or natural disasters.

What everyday risks does the passage mention people face?

Everyday risks mentioned include those from air pollution, foodborne illness, and vehicle crashes/accidents.

What does the passage say is a simple way to figure out overall risk?

The passage states that a simple way to figure out overall risk is by using a risk matrix, which combines assessments of likelihood and consequence.

Outlines

00:00

😀 What is risk and how to use a risk matrix

This paragraph defines risk as the product of likelihood of exposure to a hazard and the consequence or severity of the outcome. It gives examples of risks in daily life like breathing polluted air or eating contaminated food. It introduces risk matrices as tools to visualize and categorize risk using likelihood and consequence.

05:03

😊 Example scenarios of assessing risk with a matrix

This paragraph provides examples of using a risk matrix to assess the risk of crossing a road with bicycle or truck traffic. It shows how the combination of likelihood and consequence determines if risk is low, medium or high. More frequent trucks raise likelihood and worse potential injuries raise consequence, increasing overall risk.

Keywords

💡risk

Risk refers to the possibility of loss, damage, or any other undesirable event. In the context of the video, risk is defined as the product of the likelihood of being exposed to a hazard and the consequence or severity of the outcome. Examples of risks discussed include health risks, injury risks, and mortality risks associated with various hazards.

💡hazard

A hazard is defined in the video as something with the potential to cause harm. Examples given include air pollution, foodborne illnesses, influenza viruses, industrial accidents, and bushfires. These represent the exposure component that contributes to risk.

💡consequence

The consequence refers to the potential outcome or impact of an event. Specifically within risk analysis, it relates to the severity of the outcome should exposure to a hazard occur. Consequences can range from minor injuries to multiple deaths, depending on the context.

💡likelihood

The likelihood or probability represents how likely it is for the hazard exposure or hazardous event to occur. It is one component that contributes to the determination of overall risk. Likelihood can be categorized as low, medium/moderate, or high probability of occurring.

💡risk matrix

A risk matrix is a tool or table used to visualize, analyze and categorize risks through a combination of likelihood and consequence criteria. It allows risk to be graded as low, medium or high to support evaluation and decision-making regarding risk management.

💡bicycle

A bicycle scenario is used to illustrate likelihood and consequence components of risk analysis. Compared to trucks, bicycles pose lower potential harm, and are used as an example of lower risk exposure context.

💡truck

Trucks are provided as a contrasting scenario to bicycles when explaining risk concepts. Due to greater speed and weight, trucks pose much more severe outcomes in crash scenarios, representing higher consequence component of risk.

💡subjective

The video notes that risk matrices can be subjective, meaning that the assessment of likelihood, consequences and risk levels can vary based on individual perspectives, assumptions and contexts.

💡time frames

The video states that risk matrices do not always factor in time considerations. However, both likelihood of an event and severity of consequences may depend heavily on the relevant time frame being analyzed.

💡context

Context refers to the specific situation and circumstances surrounding a risk assessment and decisions based on that assessment. The video emphasizes that risk matrices should be designed and interpreted within the appropriate context.

Highlights

Risk can be thought of as the product of how likely someone is to be exposed to something bad and the consequence of the outcome.

A risk matrix combines information about consequence and likelihood to determine the overall level of risk.

In a risk matrix, likelihood is on one axis and consequence severity on the other axis, with overall risk categorized as low, medium or high.

The combination of likelihood and consequence determines where something falls on the risk matrix to indicate the overall risk level.

Bikes crashing rarely with minor injuries represents low likelihood and consequence, so low overall risk.

Frequent trucks crashing with major injuries represents high likelihood and consequence, so high overall risk.

Risk matrices allow visualization and categorization of risk using likelihood and consequence.

There are many types of risk matrices with varying complexity and definitions of likelihood and consequence.

Risk matrices follow the same principle of combining likelihood and consequence to determine overall risk.

Risk matrices have limitations like subjectivity, inconsistent interpretation, and not considering time frames.

Despite limitations, risk matrices are a practical tool for risk assessment and categorization.

Every day we face constant risks, from small chances to major threats.

Assessing risk helps guide appropriate actions for uncertain events and impacts.

Risk perception depends on individual perspectives and situational contexts.

Life involves balancing risks and rewards in nearly every decision we make.

Transcripts

[Music]

hello and welcome to this video on risk

we're going to have a look at what risk

is and take a look at how to use a risk

matrix first of all what is risk now if

you think about it life is full of risks

from the time we wake up to the time we

go to sleep and even in between for

example there are risks associated with

breathing did you know that air

pollution causes about 7 million deaths

each year there are risks associated

with eating foodborne illness causes

about 420 thousand deaths each year and

then there's traveling road accidents

caused over 3,000 deaths each day in

fact every day we have to make constant

decisions about the risks we face now

there are situations in which we need to

know what the risk is from certain

events so that appropriate action can be

taken for example what's the risk to

health from a new influenza virus an

industrial chemical accident or a

bushfire

but first what exactly is risk risk can

mean different things to different

people and in different contexts but in

very simple terms risk can be thought of

as the product of how likely someone is

to be exposed to something bad a hazard

and the consequence which is how bad the

outcome will be let's have a look at an

example say you have to cross a road and

you're trying to figure out what the

risk associated with this is let's take

a look at some different scenarios in

the first scenario our hazard is a

bicycle let's assume there are only

bicycles allowed on this road let's also

assume that the road is not that busy

and there's only one bicycle every 5

minutes on that road now because

bicycles don't go on that road very

often the likelihood of the bicycle

crashing into you is low right if the

bicycle does crash into you the

consequence of that would be relatively

low wouldn't it so in this scenario the

likelihood and the consequence are both

low therefore the overall risk is low

now obviously

if there are bicycles traveling more

frequently the likelihood of a crash

would be higher but the consequence if a

bicycle did crash into you would still

be low but what if things were different

let's change that bicycle to a truck now

with the truck passing every five

minutes the likelihood of a crash would

still be low however the consequence is

far more severe now imagine if it was a

busy truck route and trucks were going

on this road very frequently in this

scenario both the likelihood of a crash

and the consequence will be high which

means that the overall risk would be

high you wouldn't even consider crossing

this road right a simple way of

visualizing this and figuring out the

overall level of risk is by using a risk

matrix in a risk matrix information

about consequence and likelihood can be

used to determine the overall level of

risk let's have a look at a simple risk

matrix a risk matrix is basically a

table or grid with a measure of

likelihood on one side and consequence

on the other graded from low to high the

combination of the two which is the

overall level of risk can be categorized

as low medium or high and color-coded so

let's get back to our example in the

scenario in which there are bikes

traveling very infrequently the

likelihood is low and the consequence is

low therefore the overall risk is low

when there are more bikes the likelihood

is high but the consequence is still low

and therefore the overall risk is medium

let's consider the truck now in the

scenario where trucks are infrequent the

likelihood of a crash is low but the

consequence is high the overall risk is

medium and if it's a busy truck route

the likelihood and consequence are both

high and therefore the overall risk is

high so that's how a risk matrix can be

used to determine the overall level of

risk using an assessment of likelihood

and consequence

there are many different types of

matrices in use with varying degrees of

complexity they can have many categories

and different grades of risk they may

also have different ways of defining

categories of likelihood and consequence

for example a high likelihood may mean

that it's expected to occur in most

circumstances and a low likelihood may

mean that it may occur only very rarely

such as once in 100 years with

consequence a high consequence may mean

multiple deaths and a low consequence

may mean only minor injuries so the risk

matrix and the categories that are used

can vary and therefore should be

relevant to the situation in context in

which the risk assessment is done

regardless of this risk matrices follow

the same principle although risk

matrices have their limitations such as

being subjective not being consistently

interpreted and not taking time frames

into consideration they are a useful and

practical tool to categorize risk and

that's an introduction to risk and how

to use and interpret a risk matrix