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Risk & Risk Management – A New Way to Look at It (or Manage It)

Christine Aykac / 17 June 2015

Risk & Risk Management - A New Way to Look at It (or Manage It)

You may have noticed that some people do not even talk about risk! For a very long time risk has been synonymous with uncertainty and as a result, risk has been perceived as a “negative” event. If someone mentions risk in a meeting, others may perceive it as a negative remark. It is as if that person wants to halt the operation or stop the project.Today, we think of risk as an uncertain event or condition that, if it occurs, has a positive or negative effect on the result of the action taken.

On the other hand, risk management is not an optional activity in our professional or personal lives. We all manage risk; sometimes knowingly and sometimes unknowingly. We stop before crossing the street; look first to the right and then to the left and then cross when we feel it is safe to cross. Sometimes, we take the risk and cross despite oncoming traffic. In doing so we are accepting the consequences, such as a possible injury or even death. As you can see, risk is a key process, which is essential to the success of an event we are undertaking.

Good news is that the risk management process is the only activity applicable to professional and personal events in the same way. Whether your goal is to manage the risk at the enterprise level, for a project, or for your family events, you can apply the same risk management process and adjust the level of steps based on the expected result.

Professional organizations, including but not limited to PMI and ISO, identify Risk Management as the process of identifying, assessing and reducing negative risk to an acceptable level. In doing so, they strive to increase the probability of positive risk and also implement the right mechanisms to maintain that level of risk. Risk management identifies the uncertainty within the event, clarifies our assumptions, and considers risk for the event in the pursuit of achieving our goal.

How can we manage risk? We can accomplish this following a very basic risk management process, identified as follows:

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[daan_iconbox image=’10906′ image_size=’full’ character=” type=’standard’ title=’Step 1 – Identify Risk’ animation=’pop-up’ animation_delay=’0′]This is the most important step because if you do not know the risks for the event you are considering, you cannot manage them! The goal here is to identify as many risks as possible.[/daan_iconbox]
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[daan_iconbox image=’10908′ image_size=’full’ character=” type=’standard’ title=’Step 2 – Assess Risk’ animation=’pop-up’ animation_delay=’300′]This is where we evaluate each one of the risks, assess, and prioritize. Depending on the size of the event, we can perform qualitative and then quantitative assessments.[/daan_iconbox]
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[daan_iconbox image=’10910′ image_size=’full’ character=” type=’standard’ title=’Step 3 – Decide Risk Response’ animation=’pop-up’ animation_delay=’150′]Not every risk requires a response but some do. Here, we determine appropriate response strategies and actions for each risk identified and assessed in the previous step.[/daan_iconbox]
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[daan_iconbox image=’10909′ image_size=’full’ character=” type=’standard’ title=’Step 4 – Monitor Risks’ animation=’pop-up’ animation_delay=’450′]Risk management is an ongoing process that requires continued monitoring of all previously identified risks. Moreover it monitors for new risks and implements the risk response if the risk turns into an incident.[/daan_iconbox]
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The above risk management process should be tailored and the feasibility of risk management will depend on the size and features of the activity, project on hand, or organization.

If you would like to offer training to your clients in risk management process and tools & techniques to manage risks, you should consider this course that ITpreneurs offers in its courseware library – PMI’s Risk Management Professional.

Need more information? Please contact ITpreneurs.

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