In project management, how are risks prioritized?

In project management, risks are prioritized by estimating their impact and the probability of occurrence. This method allows project teams to assess which risks could have the most significant effect on project objectives and are most likely to happen. By evaluating both the likelihood of a risk materializing and the potential consequences it could cause, teams can focus their resources and management strategies on addressing the most critical risks first, ensuring that mitigation efforts are directed toward areas that could pose the greatest threat to the project's success.

Other methods, such as relying solely on stakeholders' visibility, team consensus, or historical data, may not provide a comprehensive or objective assessment of risks. These alternatives can lead to biases or may overlook certain risks that, while not immediately apparent or agreed upon, might still significantly impact project results. Therefore, the systematic evaluation of impact and probability is a foundational practice in effective risk management.