After you identify a list of risks, the next step it to determine the risk properties, in particular risk probabilities and impacts, which can be the most step in the process of risk analysis and management. This is often due to lack of historical data, varying experiences of the team, and biases that creep in due to differences in positions and responsibilities of team members and other stakeholders. Due to these factors, we recommend that the identification of risk and the subsequent determination of probability and impacts take place in two separate steps, and if possible in separate meetings. This can help to create a psychological breathing room for your team allowing them to put them in context as well as set the stage to review the existing list. In the next meeting, before you start the process of assigning probabilities and impact, you can review the original list, perhaps you missed a few or are redundant or irrelevant. Finally, you can then start the risk planning process, which includes the includes the identification of risk management options, including mitigation plans. Again, it is possible to use this opportunity to review your list of risks one more time.

What is the best method to frame questions to elicit an accurate assessment of risk probability and impact from an expert? There are a number of methods:

• Ask for a specific assessment of an event’s probability. Pose a direct question: “What is the probability that the project will be canceled due to safety concerns?” In many cases, experts will be reluctant to answer this question if they feel they may not have sufficient information.
• Ask the experts two opposing questions: (1) “What is the probability that the task causes safety problems?” and (2) “What is the probability the task will not cause safety problem?” You can ask these questions in different moments of time. The sum of these two assessments should be 100%. In other words, say 30% for the first question, 70% for the second. This method is called a coherence check, and it helps experts to start thinking about this risk.
• Use a probability wheel, a diagram that looks like a pie chart. Each area of the pie chart is associated with the probability of a certain outcome. Imagine that you are in a Wheel of Fortune game show. You spin the wheel. The larger the area, the greater the chance that the wheel will stop on this area. Basically, the probability wheel helps to visualize the probabilities and perform a coherence check. This is analogous to how many people prefer the dials of an analog watch to a digital watch as it provides a more visual indicator of time.

Different methods for estimating probabilities will often deliver different results for the same risks. In this case, you may want to invite another expert. Imagine that you to go a dentist and he tells you that there is a 90% probability that you will lose a tooth and he needs to extract it. Dismayed as you do not want to have a big gap in your smile, you head next door to another dentist and his assessment is 50%, but also offers a root canal as an alternative. Finally, you visit a third dentist, and the prognosis is now 5% and you probably don’t require any remedy other than a new toothbrush. What should you do given the conflicting advice? Often, the last one who has less motivation bias (profit) is most likely correct, but who knows? You may want to arrange a conference between the experts to discuss their assumptions and how they came to their conclusions, but this may not be practical.

Our preferred method to deal with this problem is to break down the risk into simpler risks and review them separately. For example, instead of asking a single question about the probability that the project will be canceled due to safety problems, you may ask two questions:

• What it is the chance that a safety problem will occur?
• What is the chance that the safety problem will lead to a project cancellation?

Psychologists found that identifying probabilities can be accurate as long as information is properly elicited. Essentially, the accuracy of the judgement depends on how questions are framed. If you have a strategic or a complex project, we recommend the use of risk workshops with a moderator who is an expert in judgment elicitation.