In every human endeavor there is an element of risk; personal, project or financial, or a combination of them all. The job is responsible for the individual is to identify risks and act accordingly. We do all this “risky” things almost every day, knowing that we are taking a risk. Rather than staying away from danger to become adept at identifying it and have a plan to deal with it if the risk. This is what the risk is, and the skills that are important in almost all endeavors.
The popular misconception that risk management is difficult or complex caused by the bureaucratic methodology of some system-oriented institutions and managers. It is not complicated or bureaucratic and need not be. Risk management is basically a simple proposition with complex dictated by nature as it applies – usually projects and parties. The basic form of risk management involves:
1. Define risk – Look for something that threatens the successful completion of the project to the original claims. Risk can be environmental, organizational, technical, legal, economic or commercial.
2. against risk – taking action to remove or minimize the potential risk to materialize. The response depends on the nature or severity of risk.
3. Acting when the risk event occurs – Invoking what contingency measures were devised for the risk has materialized
And for this to happen requires
4. Monitoring at all levels – This usually means record risk assessment profile that identifies risks, probability of its occurrence, and the impact if it is realized. Factors that score priority are those that require the most attention and monitoring. A good risk manager will devise contingency plans that reduce either the likelihood or impact of these events, and remove them from the field.
Work within a formal structured system similar to that defined ISO9001 requires the application of risk assessment practices to meet the requirements of the standard. Auditors such systems can not find specific references to risk in these areas, even if the identification of potential failure (8.5.3) is wholly concerned with the issue is nothing less than the risk.
Well managed risk taking is an important aspect of any forward thinking company, where risk is a factor in all progress or improvement. It is approved risk associated with the continuing need to drive out of a comfortable position that leads to progress and advancement. Do what we always do only because the risk seems to be negligible or are well known to be a ‘risk averse’, and progressive organizations can not be acceptable. Neither is it acceptable to pursue new ideas without understanding the potential benefits of, proper planning is a clear idea of the threats to these benefits achieved, and policies to deal with them should they materialize. We need to manage in a way that is neither predictable or careless. Risk assessment is an important tool to support this strategy. We ignore it at our peril …
Copyright (c) 2008 Ed Bones