Risk is inherent in everything we do, and we all manage risk in our day-to-day lives, often unconsciously. While unconsciously managing risk may be good enough to help get us to work on time or cross the street safely, managing risk associated with our business and that of our clients is essential, and it demands a conscious and conscientious, disciplined and deliberate approach.
At every level of your business, be that your strategic business plan, a major new initiative or project, a particular client or a routine daily business decision, you start with goals and objectives. Our risk management process builds on those goals and objectives, and asks the following questions:
- What are you trying to achieve?
- What might go wrong? or
- What unexpected opportunity might present itself?
- What might cause that?
- What would the potential impact be?
- What are you doing about it?
- Is that enough? or
- What more should you do?
The basic principles remain the same regardless of the complexity of the subject of the risk assessment. What changes is only the level of rigour and discipline applied to that process. For strategic planning, a formal written risk assessment and follow-up work plan are necessary and appropriate. For routine business decisions, a quick 30-second mental exercise might suffice.