Heat Maps

Question 1

Is it OK to use Heat Maps?

Answer 1

No

Question 2

Reasons to use heat maps.

Answer 2

None. it is inexcusable.

Question 3

How are verbal descriptions of probability and impact interpreted?

Answer 3

Different by different people.

Question 4

Range compression

Answer 4

Using a range to represent probability loses financial impact of risk.

(Lost fidelity)

Scenarios with equal expected values rated differently. (colors in heat map)

Question 5

Implying certainty

Answer 5

Value for impact and frequency (3 out of 5, etc) doesn’t express uncertainty.

Question 6

What are the flaws with heat maps (and ranges)?

Answer 6

Range Compression

Can’t answer questions about “how much risk.”

Question 7

We must treat risk as amount of future dollars lost and represent uncertainty about the future so that…

Answer 7

The business can forecast.

Question 8

Can risk ratings using ordinal values be used to calculate quantitative risk?

Answer 8

No, they are no different than colors.

Question 9

How do you make colors representing risk work?

Answer 9

Tie quantitative ranges to the colors.