How risks can help you to set your priorities right

It’s the time of the year for the oh so dreading tax declaration. No one likes to do it, but you just know: By a certain date it has to be done, otherwise, on top of the taxes, you get fined. A rather big fine that I’m not prepared to pay.

That makes it a task with a high priority. And the more we are approaching the due date, the higher the priority it gets. It will be on top of my to-do list until it’s finally done.

Did you think that your priorities only depended on what your goals and objectives are? Think again. They also depend on the risks that (might) occur, like the fine that we would have to pay if I don’t enter the tax declaration in time.

Risks are all uncertainty, good or bad. Negative risks are threats preventing you from achieving your goals or objectives. Positive risks are opportunities that could help you to achieve your goals and objectives faster and more smoothly.

One of the reasons that priorities change frequently is because the level of risk changes or risk simply occurs.

Impact, probability and proximity

If you find it difficult to know what task has priority over another one, you can look at its risks level. To calculate the risk level, you will need to estimate three parameters: The impact, the probability of occurrence and the proximity of the risk.

The impact is what happens if the risk occurs. If something has no impact, then it’s not very important, and then, the priority can’t be very high. On the other hand, if the stakes are high, if it’s a matter of life and death or the risk is to lose or gain a lot of money, you better make it a priority.

The probability is the chances that risk occurs. Let’s look at two tasks that both have a risk with the same level of impact. The one with the highest probability of occurrence will take priority over the one that is less likely to happen.

The proximity of a risk is the time frame in which the risk can occur. A risk with equal impact and probability will have a higher priority if it’s about to happen very soon, instead of somewhere in the future far away.

Calculating a task’s risk level

First of all, you need to define what the risks are. Look at what happens if you don’t do that task or project. Then for each of the cases, you can calculate the risk level. To calculate the risk level of tasks or projects is not very complicated.

For each factor, impact, probability and proximity, you give an estimate. This can be as simple as High, Medium and Low. Or you give a rating on a scale of three, five or ten.

Afterwards, you sum up the ratings, and the tasks with the highest numbers are your priorities. Actually, it’s a good idea to rank your risks based on the risk level from high to low. So now you have your ‘to do list’ ordered by priority.

Always tackle your tasks in this order, and you will see that suddenly your life has become easier and less stressful because the right things and the most important things get done first in a timely way.

Your view?

Nickita