View source for Decision Tree: Risk & Opportunities

== Identification==

[[File:Fishbone.gif|300px|left|thumb|Figure 1. Cause and effect diagram (fishbone)<ref name="Fishbone"/>]]
[[File:MindToolsMatrix.JPG|200px|right|thumb|Figure 2. Probability/impact matrix<ref name="MindTool"/>]]
<ref name="Managing"/>It is important for the project manager to identify the risks before a decision is made. Best decisions are based on information therefore it is crucial for a good project manager to start early in a project to gather information. Having the information early on will mitigate the possibility of an unforeseen event occurring. However even the best project manager will not be able to predict all risks within the projects timeline. 
All information must be processed and put in the right categories to be successfully used. This include positive and negative outcomes (opportunities and threats for the project)
There are different kind of tools to help the project manager and his/hers team to identify and manage the risks. One is to stimulate and capture the ideas from the teams brainstorming on the root of the causes with the cause and effect diagram a.k.a Fishbone<ref name="Fishbone"/>.<br>
With this the team is able to localize the problem (effect) and what causes it. When the cause and effects are found the team is able discuss why the problem happen. All this information can then be gathered for further analysation and problem solving.<br>


When the risks are identified and classified the project manager has many tool available to assess them. Probably one of the most popular ones is the probability/impact matrix. The matrix is a square where the project manager organize all found risk. The x-axis goes from low to high with the impact of risk. The y-axis is from low to high with the probability of occurrence. This is seen on figure 2. The risk in the top right corner is of critical importance and should be primary focus for the project manager. However in the lower left corner are of low importance and can mostly be ignored. The probability/impact matrix is a great way to organize and show which risk that should be focused on when taking decisions.