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Even with the systematic approach of organizational change management there are certain risks involved, that need to be considered for organizations to successfully implement change management. Change management is a discipline that lays down a set of processes and tools for dealing with change. Before we broach the topic of risks, let us understand briefly what the change management process entails.
Revolutionary change, on the other hand, has to be implemented in a shorter time frame and is usually a one-time effort.
If a company has been through a merger or acquisition exercise, the smaller organizations usually have to quickly scale up to the parent organization's processes.
If change barriers are not predicted and overcome in a timely manner in preparation for change implementation, it is certainly going to pose some risks and challenges during what is commonly called the "go-live" phase.
We can broadly categorize two types of risks: risks from a cost perspective and other, let's call them "intangible" risks, for want of a better word. Resistance to change: The smallest change is known to present at least a small amount of stress to people. Project put on hold or fully abandoned: This is a major risk which has been proven to be extensively prevalent during tough economic conditions like recession and currency depreciation.
Project fails to deliver results: Imagine a situation where the change has been implemented, millions of dollars have been spent, resistance to change has been handled and most other risk factors were dealt with.
An effective way to manage the risks mentioned above is to prepare for change implementation in advance and approach it in a systematic fashion. Probability Axis: It is a very simple process where the "Probability axis" denotes the probability of each identified risk. Impact Axis: Next on the vertical "Impact Axis", assign a percentage of impact, in the event that the risk does occur. Change management is an enormous exercise and the risks and dangers associated with it vastly differ from organization to organization and project to project.
The Risk Matrix is also popularly known as the Probability and Impact Matrix. The Risk Matrix is used during Risk Assessment and is born during Qualitative Risk Analysis in the Risk Management process.
A risk is “rated” for its Probability and Impact on a scale to understand where on the Risk Matrix it lies. It is recommended that companies have standard scales on their projects for how risks can be rated. The numbers in each cell indicates the number of risks in that cell. These cells can be drilled down into to view the risks directly from the matrix itself. We will use this matrix in the risk assessment process to determine the risk rating for each risk. This site uses cookies from Google to deliver its services, to personalize ads and to analyze traffic. Note: This article is based on PMBOK Guide Fifth Edition This is my first post based on the latest edition of the PMBOK Guide. Probability and Impact Matrix is a tool for the project team to aid in prioritizing risks. Using the risk-based framework allows the Authority to detect problems at an early stage and take regulatory action on a timely basis. If an entity fails, the risk-based framework seeks to ensure that it either returns to compliance or its exit from the market is timely and efficiently managed. The Authority has developed separate risk-based supervisory processes for use in assessing entities in the banking, trust and investment sectors and the insurance market, since the risks presented by companies in each category vary.
This involves categorising firms according to their risk profile and assists in determining the level and frequency of supervision that they will require. This involves primarily off-site, desk-based review and analysis of financial data and statutory returns received from firms. As part of its routine supervisory activities, the Authority conducts regular prudential meetings with firms’ senior management; this is in addition to the thorough off-site and on-site assessments and analysis that it undertakes in relation to regulated entities. The Authority uses risk-based supervisory models in its assessments of entities in the banking, trust, insurance and investment sectors. The Bermuda Solvency Capital Requirement (BSCR) is the Authority’s recently developed risk-based capital model, developed specifically to enhance its capital adequacy framework for the insurance sector. The Authority’s on-site programmes involve supervisory teams conducting additional assessment work within a firm’s premises, which builds on previous analysis. The Authority’s on-site programmes across all sectors are consistent with international standards, and are continually reviewed to ensure they remain effective with enhancements being applied as deemed necessary. Based on the results of its assessments the Authority will determine what supervisory actions may be required with respect to a firm’s operations and take specific actions accordingly.
The purpose of the first part of the programme is to point out existing and potential problems in supervised companies and to set priorities for their supervision.
Once the analysis in the first two stages is complete, the Authority’s risk model, CAMLBECOM, is applied. CAMBELBCOM is a risk assessment model that evaluates nine risk factors including, Capital, Assets, Market risk, Earnings, Liabilities, Business, internal Controls, Organisation, and Management risk.
This stage calls for analysis of the results of the model and an overall assessment of all data captured to this point. On-site visits are undertaken by the Authority’s supervisory teams to clarify further points arising from the desk-based work.

Written reports are prepared that focus on issues or concerns identified during the risk assessment process and that may warrant corrective attention.
The risk-based programme used by the Authority’s Insurance Department is best described in nine phases. Element 3 “Assess and document risk” documents the severity category and probability level for a potential mishap(s) for each hazard.  Each risk is assessed using the definitions in Tables 1 and Table 2 below from MIL-STD-882E. To determine the appropriate severity category as defined in Table 1 for a given hazard at a given point in time, identify the potential for death or injury, environmental impact, or monetary loss. To determine the appropriate probability level as defined in Table 2 for a given hazard at a given point in time, assess the likelihood of occurrence of a mishap. Assessed risks are expressed as a Risk Assessment Code (RAC) which is a combination of one severity category and one probability level. Disclaimer: AcqNotes is not an official Department of Defense (DoD), Air Force, Navy, or Army website. Risk is something that might happen, and an issue is something that definitely will happen or already has happened. Projects, Programmes and Portfolio’s always carry risks, and deciding not to carry out some form of risk management will result in some of these risks turning into issues needing to be resolved, and some of these issues will eventually escalate into a change to the project impacting costs or benefits. Risk Management is an essential and integral part of any Project, Programme or Portfolio as a way of keeping costs down, benefits high, and greater certainty in success of delivery. Identifying risks can be carried out in numerous ways, and it is best to keep to a varied approach rather than a single way. The identification of risks should be carried out during the whole lifecycle of the project and programme (not just a once and done exercise), especially at the start of planning for a particular phase of the project or programme.
Most organisations assess risks based on the impact if it happens (usually a low, medium or high impact), and also a probability assessment on the same criteria (low, medium and high). Within Portfolio Management, risks can also be evaluated on the breadth of impact to the organisation. Any risk seen as High Probability and High Impact is a top priority, hence falling into the Red areas on the 9 box matrix. The 9 box matrix (sometimes a 25 box) has one main issue if used in a Portfolio Management structure. But in Portfolio Management, it is the risk exposure to the Portfolio which should be concentrated on, not just another level of hierarchy to report too.
Using the diagram above, Risk No’ 2 could apply to just one particular project, yet risk No’ 1 might impact the whole Portfolio of projects, or the whole organisation.
By implementing Governance level (or Organisational Impact) as an addition to Project Impact and Probability, using the table below this practice ensures anything medium, which hits the Portfolio, would be escalated as Red (the parameters can be changed for each organisation); this model can still be used in conjunction with the 9 box matrix (see RAID under templates). A word of caution for all Portfolio Managers, this approach of aggregating project risks in to a Portfolio Risk log does not solve the identifying of Portfolio risks. Reduce – reducing the probability or impact of the Risk by placing an owner of the risk and an action for them to carry out. Re-assign – it becomes an issue, or it is handed over to another project or department to deal with.
Once the risk has been identified and assessed, the action usually follows one of the above 4 R’s.
This is the point whereby regular updates and periodically reviewing the risk should be carried out. Some risks may never close, and some might actually happen and therefore become a risk, but, risk management is there to ensure greater success of your project or programme.
Posts you have to readPMO Planet will update this section with a list of posts that we recommend you read. This article aims to highlight the typical risks associated with change management and how to work around them for a successful change implementation.
The management and leadership of today's organizations are faced with an increasing pace of change. In the corporate setup, change management is initiated to deal with either an evolutionary or a revolutionary change.Evolutionary change is a gradual process often managed well due to lack of pressing timelines, for example, a culture shift in an organization.
Both types of changes involve overcoming several barriers to change when it comes to their implementation. While each project or program has a different set of attributes resulting in different risk factors, we can derive certain commonalities among them.
You will find several more categories of risks that experts in project management have formulated, however, let us restrict our scope of this article to just these two very broad categories. From an organizational change perspective, resistance to change from employees could be both active and passive. The project seems to have been implemented successfully but it does not seem to be delivering results as expected. For this, you need to first enlist each risk (refer to the ones listed above) to the smallest detail possible and predict the probability of its occurrence.
At the end of this plotting, you would obviously want to focus on the 'red quadrant' on priority. The matrix should be revisited at regular intervals of change implementation and the risk factors must be reviewed to see if they still exist or need to be moved to a different quadrant. We cannot provide a laundry list of risks and risk management solutions for the same reason.

It is a very effective tool that could be used successfully with Senior Management to raise awareness and increase visibility of risks so that sound decisions on certain risks can be made in context. Which Risks in the process move forward into the Risk Management process will depend on the industry, company, project and people.
In other words, the probability and impact matrix helps to determine which risks need detailed risk response plans. If a particular risk has a moderate probability and the estimated impact of this risk is major, then you look into the respective row and column to identify the risk rating.
This work provides an early opportunity to flag any concerns that may result from that analysis for further examination and follow-up action. These meetings ensure that the Authority maintains detailed monitoring of industry developments via building relationships with key management, as well as identifying any specific corporate issues. These models allow the Authority to analyse the impact and probability of failures among regulated firms, in order to more intensively focus its supervisory resources. The model takes into account an insurer’s risk profile, including the inherent risk of different respective lines and complexity of the business it writes. The Authority has conducted on-site reviews on all banks and trust companies, and on a cross-section of investment firms.
This could involve employing enhanced oversight, or requiring changes to be made to a firm’s operations to ensure all regulatory requirements are being met. Such flags indicate potential areas of weaknesses in judging the health and potential of a company under analysis. Meetings are scheduled with the risk group in order to update the risk model based on the findings of the on-site work.
Findings are presented to management and group teams for further discussions of issues and follow-up on recommendations. The plan is flexible, in that it allows for changing or emerging risks, and the appropriate allocation of resources.
Any information, products, services or hyperlinks contained within this website does not constitute any type of endorsement by the DoD, Air Force, Navy or Army. The assessment of a risk is carried out once the risk has been identified, but the risk should also be periodically reviewed because the risk could become more or less of a problem as the project or programme proceeds. If you look back to the 9 box matrix above, risk No’ 2 is the highest priority, and risk No’ 1 is the lowest. Using the 9 box matrix would not flush up such small risks within a project, whereby the impact to the portfolio is great.
There should still be the activity for the Portfolio Maanger to work alongside the Exec and Senior Leadership of an organisation to look at both delivery risks, strategic risks and operational risks together; spend time out to understand what bad things might happen, and how can we stop them happening.
Because risks are continuously reviewed, the decision on how to handle the risk can change as it is re-assessed. Using a document like a RAID (Risks and Issues Document), can help everyone keep track of the risk and if it is reducing in priority, or has become an Issue to be managed. While accepting this reality and preparing for change, it becomes important to be able to predict the risks and pitfalls associated with implementing change management. Now, this would naturally take a lot of experience and expertise but it would be time well spent. In short, you want to first manage the risks that have a high likelihood of occurring and in the event that they do occur, the change implementation would be affected to a great extent.
It is vital to understand the priority for each risk as it allows the project team to appreciate the relative importance of each risk. For a moderate probability and major impact, the risk rating in the above matrix is "Medium". The models also provide a framework for conducting on-site supervisory reviews for selected firms.
The Authority extended the programme during 2008, with special emphasis placed on the domestic insurance market, Segregated Accounts Companies and further on-site supervisory reviews on a wider range of Class 3 insurance companies. No amount of doctrine, training, warning, caution, or Personal Protective Equipment (PPE) can move a mishap probability to level F. Taking timely action on projected risks will ensure greater success of the change implementation process.
However, the structured approach of risk management through identification, assessment and analysis will ensure that every challenge during change management implementation, does not make it a nightmarish experience for all the stakeholders. For example, we can have a project where the team agrees that any risk that is in the yellow, orange or red cell can move forward in the Risk Management process. It stirs up emotions that have a direct effect not only on attrition, but also results in power struggles within implementation teams.
Hope the scope of the article here emphasizes the fact that a successful change management implementation is a result of a thorough process of recognizing and mitigating risk throughout the life cycle of the change. While timely, frequent, transparent and accurate communication is the key to counter this type of risk, at the end of the day after all the efforts, it still remains a real risk.

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