Qualitative Scoring

A 3x3 rubric for fast triage

Business Risk AnalysisQualitative vs. Quantitative RiskFree preview

⏱️ About 15 min

Northwind Trading weighs two threats it cannot yet quantify: a competitor's launch (likely, moderate impact) and a single-supplier parts delay (rare, severe impact). Scored on a 3x3 rubric the competitor move is likelihood High (3) x consequence Medium (2) = 6 -- a High-band risk that gets flagged for a closer look without needing precise data first.

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The big idea: When the data is thin, score each risk on a 3x3 qualitative rubric: a LIKELIHOOD level of Low/Medium/High = 1/2/3 and a CONSEQUENCE level of Low/Medium/High = 1/2/3. The qualitative score is likelihood level times consequence level, from 1 to 9, banded Low (1-2), Medium (3-4), or High (6-9).

🎯 By the end, you'll be able to

Score likelihood and consequence each on a 3-level (L/M/H = 1/2/3) scale.
Compute the qualitative score as likelihood level times consequence level (1-9).
Band each score as Low (1-2), Medium (3-4), or High (6-9).

📎 Helpful to know first

Completion of Module 2: The Risk Register & Heatmap.

A lighter scale for early triage

Not every risk arrives with numbers attached. Before you can justify a full model, give each risk a quick qualitative score on a 3x3 rubric: a likelihood level of Low, Medium, or High scored 1, 2, or 3, and a consequence level of Low, Medium, or High scored 1, 2, or 3. The qualitative score is the likelihood level times the consequence level, so it runs from 1 to 9. Group those scores into three bands -- Low (1-2), Medium (3-4), and High (6-9) -- and you can triage a whole register in minutes.

\[ Qualitative\ score = L \times C,\ \ 1 \le score \le 9 \]

Reading the formula

A competitor launch judged likelihood High (3) with a consequence Medium (2) scores 3 x 2 = 6, which lands in the 6-9 High band. A smaller issue -- say likelihood Low (1) and consequence Medium (2) -- scores 1 x 2 = 2, in the Low band. Notice the only possible scores are the products 1, 2, 3, 4, 6, and 9; 5, 7, and 8 never appear, because no two values from 1-3 multiply to them.

✨ Fast, not final

The 3x3 rubric trades precision for speed: it cannot tell you the size of a loss, only where a risk sits relative to the others. Use it to sort and flag, then promote the High-band risks for the quantitative work in the next lessons.

🎮 3x3 Qualitative Scorer LIVE

Predict first: Predict first: likelihood High (3) and consequence Medium (2) -- what is the score and which band lights up?

Slide the likelihood and consequence levels (1-3) to watch the qualitative score and its band update.

📝 Worked example: Northwind Trading scores a competitor launch as likelihood High (3) with consequence Medium (2). Find the qualitative score and its band.

1. Qualitative score = likelihood level x consequence level = 3 x 2 = 6.
2. Score 6 falls in the 6-9 band, so this risk is High.

✓ Qualitative score = 6; band = High

✏️ Practice: A risk is scored likelihood Medium (2) and consequence High (3). What is its qualitative score?

💡 Hint

The qualitative score is the likelihood level multiplied by the consequence level.

Solution

1. Qualitative score = 2 x 3 = 6.
2. Score 6 falls in the 6-9 band, so this risk is High.

Check your understanding

1. A risk scores likelihood 3 and consequence 2. What is its score and band?

3 x 2 = 6, which falls in the 6-9 High band.

2. Why use a 3x3 qualitative rubric?

A 3x3 rubric turns words into a quick comparable score when you lack the data for a full quantitative model.

✅ Key takeaways

A 3x3 rubric scores likelihood and consequence each at L/M/H = 1/2/3.
The qualitative score is likelihood level x consequence level, ranging 1 to 9.
Scores band as Low (1-2), Medium (3-4), or High (6-9) for quick triage.

➡️ Qualitative scoring sorts risks fast, but it cannot say how large a loss to plan for. Next we set a materiality threshold that decides when a risk is worth the effort of quantitative modeling.

Ready for the next step? Back to the course outline →